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When should you buy long-term care insurance?

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A long-term care insurance policy is a vital part of your financial plan, so it's important to know when to buy one.   Getty Images

For many seniors, the right insurance coverage is a vital component of their financial plan. Whether it's Medicare supplemental insurance, a life insurance policy or another type of coverage, having the right policies in place can help protect your finances during retirement — and keep your savings from being depleted due to unexpected costs.  

But if you're at or near retirement age, one type of insurance that you may not have considered yet is long-term care insurance. This type of insurance is designed to provide coverage for the costs associated with extended care services, such as nursing home care, assisted living facilities and in-home care. 

And, this type of policy can be a crucial part of financial planning, especially considering that people are living longer and the costs of long-term care can be substantial. But when is the right time to buy long-term care insurance?

Explore your long-term care insurance options here.

When should you buy long-term care insurance?

There are generally no age restrictions or requirements for purchasing a long-term care insurance policy. As such, you're generally able to buy a long-term care insurance policy at nearly any age — assuming that you qualify based on the insurer's unique requirements. 

However, there is an optimal time to purchase long-term care insurance, and that's typically when you're in your 50s or early 60s. There are a few reasons why it makes sense to consider a policy purchase during this time, including:

  • Affordability: Buying long-term care insurance in your 50s or early 60s typically means lower premiums compared to purchasing it later. Waiting until you're older can significantly increase the cost of coverage.
  • Health eligibility: You're more likely to meet the health requirements for coverage if you apply when you're in good health. As you age, health issues become more common, which can make it harder to qualify for long-term care insurance or result in higher premiums.
  • Adequate planning time: Purchasing long-term care insurance in your 50s or early 60s gives you ample time to plan and adjust your financial strategy accordingly. It ensures that you have a comprehensive plan in place before you might need long-term care services.

Explore how long-term care insurance could benefit you here.

Factors to consider

To decide on the right time to buy a long-term policy, it may help to consider the following factors:

Age and premiums

Insurance companies consider the age at which you purchase the policy as a key determinant in calculating your premium rates. In turn, your age is one of the most significant factors to consider when deciding on the timing of a long-term care insurance purchase. 

Younger individuals are statistically less likely to need long-term care services in the immediate future. So, if you purchase a policy early, you can generally secure coverage at a lower cost, potentially saving thousands of dollars over the life of the policy.

Health status 

Health plays a crucial role in your ability to secure long-term care insurance. Most insurance providers require applicants to undergo medical underwriting, which involves assessing your current health and medical history, so it's important to factor in your health status when determining when to purchase a policy. 

If you have pre-existing health conditions, or if your health deteriorates as you age, you may either be denied coverage or charged significantly higher premiums. But starting the application process when you're in good health gives you the best chance of being approved and obtaining more favorable rates.

Financial preparedness 

It can also help to assess your financial situation and determine how you would cover long-term care costs if they were to arise. If you have substantial savings and assets that could comfortably cover potential long-term care expenses, you may choose to self-insure. 

However, keep in mind that the costs of long-term care can quickly deplete even substantial nest eggs, so it's crucial to assess the adequacy of your financial resources and the potential impact of long-term care costs on your overall financial plan. You may find that it's still worth purchasing a policy to avoid financial issues later on.

Family history

Your family's health history can provide insights into your own health risks and the likelihood of needing long-term care. If you have a family history of conditions such as Alzheimer's disease, cancer or heart disease, which are often associated with long-term care needs, it may be wise to consider purchasing insurance at an earlier age to mitigate these potential risks.

Risk tolerance 

Everyone's risk tolerance is different. Some individuals are comfortable taking the risk of not having long-term care insurance, banking on the possibility that they may not need it. Others prefer the peace of mind that comes with knowing they have coverage in place, even if they never use it. 

The bottom line

Long-term care insurance is an essential component of financial planning for many people, but it's important to get the timing right when purchasing a policy. In general, the right time to buy this type of insurance depends on various factors, including your age, health status, financial preparedness, family history and risk tolerance. 

However, purchasing long-term care insurance in your 50s or early 60s is often the most cost-effective and practical choice. Remember, though, that the decision ultimately depends on your unique circumstances, so it's essential to plan ahead and secure coverage when it makes the most sense for you.

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