Many people plan for upcoming events in their life. Most however, don’t plan for one very significant event – not being able to care for themselves!
Thus, the focus of Long Term Care Awareness Month is to emphasize the importance of planning for the possibility assistance with day to day life activities will be needed in the future. Why? The probability of needing help is very high and the cost is significant to the family caregivers who have to perform complex tasks.
To help you better understand the impact living longer is having I am pleased to provide information from two sources:
- The Long Term Care Planning guide Kiplinger’s Personal Finance magazine developed with the American Association of Long Term Care Insurance. It was published in the November 2014 issue. It can help you take steps to plan for what you want to happen you have a change in health and the kind of help you would like.
• The Life Happens organization also supports this Awareness Month and has useful information and resources on their site. Note especially the tabs on this page – Who Needs – Types of Care – Getting Coverage.
Want to also provide some information about Long Term Care insurance terms from LifeHappens.org
These easy to understand definitions may be useful.
The answer – yesterday!
The cost to buy Long Term Care insurance does not go up each day a person puts off buying. However, the reason I answered yesterday was to emphasize premiums do go up each birthday. The premium, which will be charged, is based on your age the date you sign an application to enroll. For example, premiums are 33% higher at age 55 vs 50 and 60% higher at age 60 vs 55! Another way to say this – premiums can triple from age 50 to 70. Thus, it is very important to take action today.
One of the biggest reasons for buying today is because a dollar spent on premium buys more the younger you are. How? If you wait until age 55, you would have to select a plan with an initial benefit pool of over $400,000 plus pay a higher age based premium, to achieve the same protection as a person who bought a plan with an initial benefit pool of $250,000 at 45. The very important 5% compound inflation option, which increases a person’s benefits each year, makes this special value possible.
The American Association of Long Term Care Insurance (AALTCI), a professional association I’m actively involved in, reports in their 2012 LTCi Sourcebook 55% of people who bought this important insurance in 2010 indicated the reason they did was because the cost to buy in the future would increase.
There are some other advantages to buying today related to – the lower the rates the younger you are:
● A good health discount of up to 20% may be available. The AALTCI 2012 LTCi Sourcebook reports 42% of people between 40 and 49 qualified for a good health discount. Between age 50 to 59 only 32% received a discount – for age 60 to 69 it dropped to 21% and for age 70 to 79 it was only 17%.
● A higher chance of being accepted: If you wait to buy your ability to obtain this important kind of insurance protection may be lost because of a change in health, which resulted in not being insurable! The AALTCI 2012 LTCi Sourcebook reports 16% of people between age 50 and 59 were not able to qualify for this important protection because of health problems. Between age 60 to 69 – 24% of applicants did not qualify and between age 70 to 79 – 41% were declined.
The AALTCI has an informative video, about 5 minutes, on – When is a good time to buy Long Term Care insurance. It highlights good points about the importance of planning and things, which affect buying.
© John C Parker, RHU, LTCP – August 5, 2012
Voice – (860) 739-0005
Learn more about the value of this important kind of insurance – http://www.LongTermCareIns-CT.com