Long-Term-Care Insurance: When Should You Buy In?

A lot of baby boomers still haven’t given much thought to the purchase of a long-term-care insurance policy.

However, the cost of a long-term-care need could be the biggest threat to their retirement portfolios.

As of last year, the average cost of a private room in a nursing home for just one year was more than $75,000 – and it’s expected to rise this year to approximately $79,000.

Plus, with an average stay in a nursing home of just under three years, these costs can really start to make a dent in retirement assets.

So is there a good time to purchase long-term-care insurance?

According to a number of long-term-care specialists, the ideal time to purchase a policy is between the ages of 50 and 60.

Typically, this is when people are nearing the end of their working years, and with a 10-year premium pay option, the policy can be paid for, in most cases, long before the coverage is even needed.

Another reason not to wait too long to purchase a policy is because an applicant’s health will play a big factor in whether or not he or she will even qualify for coverage, as well as the premium amount if he or she does.

In fact, it’s been estimated that roughly 20% of long-term-care insurance policy applicants are turned down for health-related reasons.

Certainly, the cost of insurance plays a big part in when to apply for coverage as well.

This is because, on average, even waiting just one more year to apply can cost between 2% and 9% more – and the older an applicant is, the more the premium cost will increase for each year waited.

Although people don’t like to think about having another insurance premium to pay, the amount that long-term-care insurance could actually save a policyholder far outweighs the expense of the premium.