Long-Term Health Care Insurance: When Should a Senior Purchase a Policy?

SCJ is always looking at reader comments to determine what you want to read more about.  Two suggestions surfaced as we reviewed the many emails we receive telling us what you want to hear more about.  They both relate to financial issues concerning seniors.   The first, which we deal with here,   relates to long-term care insurance.  A reader writes

                It is easier to qualify and less expensive if the application can be made prior to age 60, at which point, the cost increases significantly.  The strength of the company issuing the policy is important. Companies are rated by Standard & Poor, Moody, AMBest, & Fitch. 

Information like this isn’t always readily available.  But let’s take a look at it.  Applying for long-term care insurance (LTC) prior to the age of 60 make sense in two arenas:

(1)                          The cost in terms of monthly or annual premiums is less because you ostensibly will be paying for the insurance over a longer period of time and can therefore get the plan at a lower cost. Actuarial tables have these probabilities all figured out.  We’ve just reduced the language to what most of us can understand.  It’s a win-win.  You get LTC coverage and the insurance company has a greater probability of not losing money on you.

(2)                          Qualifications for LTC aren’t impossible, but companies issuing LTC policies take a very close look at your past medical records.  They also take a close look at your current health, and then they decide if you’re a good risk or not.  What this means is that, the younger you are, the more likely you are to be in good health and not have too many blemishes on your medical records.  The older you are, the more likely you are dealing with health issues, and may prevent you from qualifying for LTC insurance.

 So for those of you not yet 60, we highly recommend looking at LTC insurance plans.  Search the internet.  Compare plans.  Talk with trusted advisors.  And then decide what’s right for you.  For those of you over 60 and without a plan, it’s not hopeless.  But the longer you wait, the more it will cost and the more difficult it will be to qualify.