Archive for October, 2010

3 Reasons For Buying Long Term Care Insurance Now

October 7, 2010

Long Term Care insurance is underwritten.  This mean you have to qualify medically before an insurance company will issue a policy.  You are exposed to significant financial risks every day that you wait to apply..

Reason #1: Virtually all Long Term Care insurance companies have at least two rate classes (John Hancock has four and MassMutual has five).  The higher the rate class, the lower your insurance premium.  People do not generally become healthier as they age.  As you wait “until the right time” your chances of qualifying for a really good rate class diminish.

Percentage of Applicants Qualifying for Good Health Discounts*

Under Age 30:        81.0%

Ages 30-39:            74.0%

Ages 40-49:            62.0%

Ages 50-59:            46.0%

Ages 60-69:            38.0%

Ages 70-79:            24.0%

Age 80 & over:          9.0%

Reason #2: Never mind what rate class you may qualify for.  Let’s instead look at whether or not the insurance company will even issue a policy.

Percentage of Applicants Declined Coverage*

Below Age 50:             9.5%

Ages 50-59:               14.0%

Ages 60-69:               23.0%

Ages 70-79:               45.0%

Age 80 & over             66.0%

Reason #3:A key factor in the pricing of Long Term Care insurance is your age when you apply.  Couple the higher cost per $100 of benefit if you wait with the need to buy more units of benefit because of inflation, and you get a much higher premium…and it becomes even worse if your health has changed.

Finally: Waiting to buy Long Term Care insurance results in your not being covered for all of the nasty things that can and do happen to us while we travel life’s highways.  Please don’t place your family in the position of saying “but you could have had your costs of care paid for by insurance!”.

*American Association for Long Term Care Insurance, 2010 LTCi Sourcebook,

© Raymond Smith, The Long Term Care Specialist, 2010