Waiting on Long-Term Care Insurance Can Lead to Decline

The average age of a person purchasing Long-Term Care Insurance continues to drop. Low premiums and better health leads to even lower premiums. If you wait you face the inability to obtain coverage or much higher premiums.

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Waiting on Long-Term Care Insurance Can Lead to Decline
4 Min Read January 5th, 2020 Updated:April 26th, 2020

When experts suggest you obtain Long-Term Care Insurance coverage when you are younger, they were not exaggerating. If you wait until you are after age 60, you have a substantially higher chance of being declined for coverage according to a newly released report from the American Association for Long-Term Care Insurance (AALTCI), a national consumer advocacy and education group. 

"Individuals who want Long-Term Care Insurance protection must health qualify, and our health generally gets worse as we get older." 

 Jesse Slome, AALTCI's director

Lessons from the Virus Crisis

The virus crisis has especially impacted the elderly and those with pre-existing health conditions. It has created a "tipping point," pushing people into an extended care situation or requiring a person to obtain a higher level of care.

These unexpected events make planning for aging and longevity even more critical. 

Chance of Coverage Decline Increases With Age

For those age 75+, the report indicates the underwriters reject 51.5 percent of all applications due to the health or memory problems of the applicant.

Forty-four percent of applicants ages 70 to 74 get declined for coverage. For ages 65 to 69, 32.5 percent see their applications rejected.

These numbers do not reflect the number of applications approved but received a more expensive rate class due to their health.

"This is something you clearly have to do well before turning 75."  

"Our advice is to look into this coverage between the ages of 55 and 65. Once people get onto Medicare, they often take advantage of all the health screens that Medicare pays for, and while those are great, they can uncover health issues that can prevent you from qualifying for Long-Term Care Insurance."

Jesse Slome

LTC Insurance Specialists Recommend Acting Before Retirement

Many Long-Term Care Insurance specialists are suggesting even younger (40s or early 50s) to take advantage of much lower premiums and good health discounts. In addition, some insurance companies consider some family history into account when underwriting an application. Some of that family history may not yet have occurred when you apply for your coverage younger.

Only 16 percent of applicants age 49 or younger were declined. Twenty-one percent saw their application rejected ages 50 to 59. While most people saw their applications approved, you see even younger consumers saw their application declined due to current health or family history.

Long-Term Care Insurance decline rates increased slightly from the last time the AALTCI compiled data in 2014.

"There little attention paid to educating consumers about the age to start investigating Long-Term Care Insurance as an option to cover potential risk of needing care at home or in a skilled nursing facility." 

Jesse Slome

Underwriting Criteria  and LTC Insurance Premiums Vary 

The underwriting criteria vary between insurance companies as do the premiums. Premiums are based on age and health at the time of application, in addition to other factors like the amount of benefits you wish to have.

An experienced Long-Term Care Insurance specialist will generally ask many detailed questions about your health, family history, retirement goals, and other factors to match you to the right insurance company.

LTC Insurance is Affordable But You Better Shop

Premiums can vary dramatically, even for the same coverage. This is why it is essential to use the assistance of a Long-Term Care Insurance specialist in researching, designing, and shopping for the right coverage at the best value.

Start your research early, well before you retire. Planning for the financial costs and burdens of aging is an essential part of your overall retirement plan. You can use the tools available on LTC NEWS to assist you in your research.

Guide to LTC Insurance Planning Great Resource

The LTC NEWS Ultimate Long-Term Care Insurance Guide is a great place to start. Start reading by clicking here.

Then find the current and future cost of long-term care services where you live on the LTC NEWS cost of care calculator. Click here and locate where you live.

Be sure to speak with a qualified and trusted Long-Term Care Insurance specialist. Be sure to ask them if your state participates in the Long-Term Care Insurance Partnership Program, which provides policies with dollar-for-dollar asset protection.

Find Qualified Long-Term Care Specialist to Shop & Design Affordable Plan

Also, be sure they represent the major insurance companies that offer these products, including both traditional plans and asset-based (hybrid) policies that combine life insurance and long-term care. Find a specialist by clicking here.

It would be best if you planned before retirement when you still enjoy good health and low premiums.

Remember, long-term care does happen at all ages. People require care due to an illness, an accident, or the impact of getting older. An affordable Long-Term Care Insurance policy will safeguard savings and income and give your family the time to be family and not into becoming your future caregiver.

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About the Author

Linda is a former journalist who now enjoys writing about topics she is interested in so she “can keep her mind active and engaged”.

LTC News Contributor Linda Maxwell

Linda Maxwell

Contributor since December 11th, 2017

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