Waiting on Long-Term Care Insurance Can Lead to Decline
Delaying your decision on purchasing Long-Term Care Insurance can add to the cost or even prevent your ability to obtain coverage because of pre-existing health issues. Today, most people get coverage in their 50s.
If you wonder when is the best time to plan for future declining health and aging, the answer is simple. Before your health changes and you get too old.
You never know when your health might change, and you will need help with everyday living activities. Will you have mobility problems or dementia? When you do need long-term health care will you have enough resources to pay for the quality care you deserve?
Inflation and economic conditions also change. Being prepared to have enough resources to access the care you will need is vital to any retirement plan. For many people, Long-Term Care Insurance is an affordable option. But when you pull the trigger and get a policy?
Earlier the Better
When experts suggest you obtain Long-Term Care Insurance coverage when you are younger, they are 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 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
However, many consumers want to wait. Even Dave Ramsey, a famous radio host, and financial consultant, suggests waiting to age 60 despite being a big believer in Long-Term Care Insurance. But is age 60 too late?
Probably. Not only is Long-Term Care Insurance more affordable when you purchase a plan in your 40s or 50s, but your health will also be better. Your reasonably good health gives you the ability to plan in the first place.
Lessons from the Virus Crisis
The virus crisis has significantly impacted the elderly and those with pre-existing health conditions. It has created a "tipping point," pushing people into an extended care situation sooner 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 aged 75+, the report indicates the underwriters reject 51.5% 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% 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.
LTC Insurance Specialists Recommend Acting Before Retirement
Many Long-Term Care Insurance specialists suggest obtaining coverage in your 40s or 50s to take advantage of much lower premiums and good health discounts. Today, most people purchase coverage in their 50s.
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 when you are younger.
For example, if you are 60, your parents, if living, are in their 80s. Whether they are living or not, they have experienced a lot of health conditions, and some of those could impact the underwriting of your policy.
While most people saw their applications approved, even younger consumers saw their applications declined or rated due to current health or family history. The report showed that only 16% of applicants aged 49 or younger were declined. Twenty-one percent saw their application rejected for those aged 50 to 59.
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.
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 total amount of benefits you wish to have and family history.
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. The variance can be over 100% between insurance companies. 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.
Planning for the financial costs and burdens of aging is an essential part of your overall retirement plan. Start your research early, well before you retire. You can use the resources available on LTC NEWS to assist you in your research.
Remember, the need for long-term health care can happen at all ages, but the risk increases as you get older. People require care services due to an illness, an accident, or the impact of getting older. An affordable Long-Term Care Insurance policy will safeguard savings and income. It will also give your loved ones the time to be family and not your future caregiver.
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”.
Contributor since December 11th, 2017
Long-term health care costs will dramatically change your lifestyle and affect your cash flow. If you become dependent on unpaid and untrained family caregivers, they will face stress, anxiety, and health and financial hardships. You probably don't want to place these burdens on those you love.
The solution for many families is Long-Term Care Insurance. These affordable plans give you guaranteed tax-free benefits to fund your choice of quality care services, including in-home care. Some policies will pay for modifications to your home.
You must, however, get a plan before your health substantially changes. Most people get coverage in their 50s when premiums are lower, their health is better, and the most options are available.
Seek Professional Help Planning for Long-Term Care
Experts recommend seeking the help of a qualified and experienced Long-Term Care Insurance specialist to help you find the right coverage. A specialist will match your age, health, and family history with the right coverage at the right price.
Long-term care is a very specialized area, and few insurance agents and financial advisors have the expertise. Find a specialist who represents the top companies as premiums can vary over 100% between insurance companies. Leading specialists will often have over 500 clients with Long-Term Care Insurance.
A specialist will save you money, and you will have peace of mind knowing they are making the appropriate recommendations - Work With a Specialist | LTC News.
Planning Tools and Resources Available on LTC NEWS
Planning for the future is never easy, but long-term health care planning can be very complicated and comes with many emotions. Getting the right tools and resources will make the process much easier.
One of the goals is to reduce the stress and anxiety usually placed on your family at the time of crisis. LTC NEWS can be beneficial in providing you with important information for you to consider.
LTC NEWS has put in place several resources, including:
The LTC NEWS Cost of Care Calculator will show you the current and future cost of long-term health care services where you live. Plus, each state has vital state-specific information you should know - Cost of Care Calculator - Choose Your State | LTC News
The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area.
Compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.
A detailed tax guide that includes available tax incentives can be found by reviewing the Long-Term Care Tax Benefits Guide.
Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.
Need Help Now for Mom or Dad?
If your family is already in crisis and you need to find help for mom or dad, LTC NEWS can help. We have put together several comprehensive guides to help you in your process.
Start by reading our four guides -
If your loved one is lucky enough to own a Long-Term Care Insurance policy, be sure they use it. Sometimes families wait, thinking they can save the benefits for a rainy day. Waiting on using available Long-Term Care Insurance benefits is not a wise idea.
Get Assistance in Filing a Long-Term Care Insurance Claim
Many insurance companies have issued Long-Term Care Insurance policies over the years. Filing a claim can sometimes be complicated unless you know what to do or get expert help and assistance.
Don't allow the claim process to stop you from using the benefits available in an LTC policy. Quality care obtained early will help provide a better quality of life and reduce the risk of a deep decline and facility care.
If you need help in starting the process of a Long-Term Care Insurance claim, LTC NEWS can help. LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with a Long-Term Care Insurance policy. We have teamed up with Amada Senior Care, who will do all the work - free with no obligation.
Get help finding quality caregivers or long-term care facilities and get recommendations for a proper care plan, whether a person has a policy. - Filing a Long-Term Care Insurance Claim | LTC News.
Advantages of Reverse Mortgages
Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance. You might be eligible at younger ages as well.
Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, and even help with cash flow during your retirement.
Learn more by asking questions to an expert. Mike Banner, LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages.
- Just "Ask Mike." - Reverse Mortgages | LTC News.
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