It's easy to forget that you might need long-term care insurance when you are planning for your future.

And here's the thing: 

Long-term care insurance can be both expensive and difficult to pay for out of pocket.

should i buy long term care insurance

The main question becomes "Should I buy long term care insurance?" 

Before you decide, you should understand what long-term care insurance covers, when you should buy it, and how much it costs and that's what this post will cover today.

​In This Article

Should You Buy Long-Term Care Insurance? 

Whether you should buy long-term care insurance depends in part on your financial situation and how you want to be covered later in life.

According to the Insurance Information Institute (III), if you plan to have a lot of money as you age, long-term care insurance may not be something you need.

That's because, with substantial income, you can pay for care out of pocket—and by significant, we mean upwards of a million dollars in savings.

Assuming, like most of us, you aren't a millionaire, considering long-term care insurance can make financial sense.

Long-term care insurance covers you if you need to move into a nursing home or assisted living facility.​

It covers the care you need for a long-term illness or disability and offers death benefits to your family.

According to Forbes, the average annual cost of professional in-home care is $46,332, and a private room in a nursing home typically costs $92,378 per year.

Those expenses are often not covered by Medicare or retirement benefits.

If you anticipate possibly needing these types of care, long-term care insurance or an alternative will be necessary.

What's The Average Cost Of Long-Term Care Insurance?

Long-term care insurance costs vary but the rates are always cheaper when you are younger.

The American Association for Long-Term Care Insurance (AALTCI) states that for a single person at age 55, the average cost of long-term care insurance is $2,007 per year or $1,720 per year with a preferred health discount.

On the low end, you can expect to pay $1,764, and the high sits at $3,466. 

For couples and older individuals, however, the numbers change.

For couples at age 55, the AALTCI says the average rate is $2,466 per year, and if you wait until age 60, you can expect to pay $3,361 annually.

The older you are when you purchase your plan, the higher your annual expenses.

The cost also depends on your provider, your current health, and what your policy includes.

At What Age Should I Buy Long-Term Care Insurance?

Since we've mentioned that purchasing long-term care insurance is cheaper the younger you are, you might be wondering, "Should I buy long-term care insurance in my 40s?"

In this case, the answer is probably no.

While you'll have lower premiums, you must also consider how long you'll be paying those premiums before you need long-term care.

Most people don't file a claim on their long-term insurance until they're much older. If you start paying at age 40, you might pay premiums for 40 more years before you need your insurance. 

Referring to the AALTCI again, the ideal time to purchase long-term care insurance is in your 50s.

Your premiums may not be as low as they would be in your 40s, but you'll still get a reasonable rate, and you can cut ten years off your payments. 

As you get older, you may no longer qualify for long-term care insurance.

Insurance companies are more likely to deny you if you have pre-existing conditions, and you can't apply for long-term care insurance at the point you need to make a claim.

Ideally, you want to apply for long-term care insurance as early as possible without locking yourself into paying premiums for longer than necessary.

What Happens If I Wait Too Long?

If you wait too long to purchase long-term care insurance, you risk being denied for a policy altogether, putting yourself in a position of possibly going without coverage when you need it.

It would be best if you got long-term care insurance before you turn 65, as most people experience long-term health struggles starting in their 70s or 80s. By age 70, you could pay premiums twice as high as you would at age 55.

You may also face other consequences for not having long-term care insurance.

Without insurance, you might not be able to afford the care you need out of pocket.

It can make things difficult for you and your family, which is why long-term care insurance for parents is important to consider early.

buy long term care insurance

Will You Be Able To Pay Out of Pocket?

Out of pocket, long-term care can be financially challenging.

Social Security benefits and savings don't cover everything, especially when long-term care costs can exceed $100,000 per year, depending on your needs.

If you only need one year of care, you may have the funds for it—though in that case, you could also consider a short-term care policy.

However, if you need care for more than two years, consider what your savings allow for.

If you have the necessary $1.5 million to pay for a nursing home or in-home care, you can pay for your care out of pocket.

However, most people can't afford to devote this much of their savings. If you can, it may exhaust your savings, leaving nothing for your family.

Your family also won't receive death benefits if you pay out of pocket for long-term care.

Consider what is most important to you when it comes to your funds after your death before deciding to pay for your care out of pocket.

Taking Action

If you're still wondering whether you should buy long-term care insurance, the answer is most likely yes.

However, your circumstances will affect your decision, and if you have the funds saved, you may be able to cover your expenses out of pocket.

When it comes to long-term care insurance, the timing matters, and ideally, you want to have this type of insurance by age 65.

There is no need to wait around, you can click here to get a few quotes or click one of the buttons above. 

Sa El

About the author

Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry.  He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also an Official Member of the Forbes Finance Council, a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.

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