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LTCI Cost of Waiting

What Is the Potential Cost of Waiting to Purchase a Long-Term-Care Insurance Policy?

According to The Wall Street Journal, people typically buy long-term-care coverage in their 50s or early 60s and often pay premiums for 20 to 30 years before making a claim.

There is a time-honored phrase related to long-term-care insurance and it goes like this: "Your money pays for long-term-care insurance, but your health buys it."

As one ages, the risk of not being able to qualify for long-term-care insurance may increase due to deteriorating health.

In addition to the risks of health problems as we age, the dollar cost of long-term-care insurance rises dramatically because the insurer has less time to accumulate sufficient reserves to cover its part of the risk.

A complete statement of coverage, including exclusions, exceptions, and limitations, is found only in the long-term-care insurance policy. It should be noted that carriers have the discretion to raise their rates and remove their products from the marketplace.

According to LongTermCare.org, in 2013, the annual average cost nationally for long-term care was $83,950, up from $81,030 in 2012.

 

Long-term-care premiums are based on your age at the time of application. This calculator assumes that premiums are 8 percent higher each year that you delay purchase. Individual policies may vary.

Your Results

Current age: 0
Annual premium for a long-term-care policy: $0
Age you anticipate buying long-term-care insurance: 0
Age you anticipate requiring long-term-care benefits: 0
In this case, your premium at the higher age would be: $0
The total cost difference now through the year when you expect to need benefits as a result of delaying the decision to acquire long-term-care coverage: $0

Based on the information you provided, this chart illustrates the estimated annual costs of a long-term-care insurance policy now vs. waiting. Note that in many cases, your total cost for coverage may be lower if you purchase sooner at a lower premium than if you wait and pay a higher premium, despite the fact that you would potentially pay premiums for fewer years.

Cost of Waiting to Purchase Long-Term-Care Insurance

 

This hypothetical example is only an estimate and assumes that premium levels remain stable over time. This example does not represent any specific insurance policy or product. Actual results will vary.

This information is intended for use only by residents of (AZ, CA, CO, FL, GA, HI, ID, IL, LA, MN, MS, MT, NC, NV, OH, OK, OR, SC, TN, TX, UT, WA, WI, WY). Securities-related services may not be provided to individuals residing in any state not listed above.

For parties residing outside of the U.S., this information is: (i) provided for informational purposes only, (ii) not and should not be construed in any manner as an offer to participate in any investment or to buy or sell any securities or related financial instruments, and (iii) not and should not be construed in any manner as a public offering of any financial services, securities or related financial instruments.  

Products and services listed may not be available, or may have restrictions, depending on client country of residence.

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