This Is the Best Age to Buy Long-Term Care Insurance

senior receiving long-term care
Photo by Photographee.eu / Shutterstock.com

Long-term care is jaw-droppingly expensive. The national median cost for staying in a private room at a nursing home is $102,200 per year, according to Genworth Financial.

Receiving care in your home is cheaper, but even a home health aide will set you back more than $50,000 a year, assuming they provide care for six hours a day.

Don’t assume Medicare will pick up the tab, either. It doesn’t provide coverage for ongoing custodial care such as that typically provided by assisted living and nursing home facilities.

State Medicaid programs will pay for nursing home care but only after you’ve depleted almost all your assets first.

Buying long-term care insurance is one way to cover the cost of care, but policies can come with their own hefty price tag.

Premiums will be lower if you buy coverage when you’re younger, but you may end up paying for years on a policy you don’t need yet. Wait too long, and you could be denied coverage.

So what’s the sweet spot for purchasing long-term care insurance? It seems to be in your 50s.

Consider long-term care insurance before age 60

Premiums for long-term care insurance climb as you age, but that’s not the main reason you want to buy early. Instead, you want to have some coverage in place in your 50s before any health issues could waylay your application.

“Something as simple as going to physical therapy could cause a denial,” says Erin Ardleigh, founder and president of Dynama Insurance, which is based in New York City but helps clients nationwide. “Waiting until 60 (to buy insurance) can be risky.”

At age 65, about a third of long-term care insurance applicants are denied, according to 2019 data from the American Association for Long-Term Care Insurance.

More than half of applications for those age 75 and older are denied.

Long-term care insurance costs by age

Once you hit your 60s, insurance prices start to go up significantly as well.

The following is an example of how monthly premiums increase based on an applicant’s age.

These estimates, provided by a Mutual of Omaha calculator, assume a single female in New York is applying for coverage of $5,000 a month for 36 months.

  • Age 45: $148 per month
  • Age 55: $182 per month
  • Age 65: $263 per month
  • Age 75: $473 per month

While most policies are designed to have level premiums, there is no guarantee they won’t go up, Ardleigh says. Premiums may also depend upon whether someone is buying insurance as part of a couple and what elimination period is included in the policy. The elimination period is the amount of time that must pass after you begin needing care before benefits are paid.

The American Association for Long-Term Care Insurance notes over half of claims begin when a policyholder is in their 80s and only 4.5% of claims start prior to age 70.

Buying some coverage is better than none

Ardleigh recommends her clients buy policies that have, at a minimum, a $5,000 a month benefit for 24 months. A higher monthly benefit means the opportunity to stay in a nicer facility should you need care. However, purchasing more than three years of coverage may be unnecessary for many people since the average nursing home stay lasts just two to three years.

If a policy with those minimums is too expensive, any coverage will be better than no coverage.

“Imagine it’s snowing,” Ardleigh suggests as an analogy. “Anything you put on it going to help when you go outside.”

While a light jacket isn’t as good as a heavy winter coat, it’s better than walking outdoors without any outerwear.

If you can’t afford a traditional long-term care policy or aren’t sure if you’ll need long-term care, a hybrid life insurance policy is another option. These policies provide coverage for long-term care, but any benefits not used during the policyholder’s lifetime are passed on to heirs as a death benefit.

“We’re definitely seeing people who are younger buying long-term care insurance through hybrid policies,” Ardleigh says.

While not everyone will have the same long-term care insurance needs, everyone needs to have a long-term care plan. Talk to a trusted insurance broker and get quotes from several companies and product lines to help you decide what is the best way to prepare for covering the costs associated with home health, assisted living and nursing home care.

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Read Next
7 Reasons You Should Not Pay Off a Mortgage Before Retirement
7 Reasons You Should Not Pay Off a Mortgage Before Retirement

Here’s why it often makes financial sense to carry a mortgage into retirement.

10 Mistakes That Cost You Money at Warehouse Stores
10 Mistakes That Cost You Money at Warehouse Stores

Wholesale clubs might have great deals, but these mistakes will cost you.

11 Expenses That Quietly Drain Your Wallet
11 Expenses That Quietly Drain Your Wallet

It’s scandalously easy to overspend in these areas of your life.

9 Affordable Ways to Make Your Home Look Expensive
9 Affordable Ways to Make Your Home Look Expensive

These products from Amazon add elegance to your home without the expense.

19 Things You Should Never Buy at a Grocery Store
19 Things You Should Never Buy at a Grocery Store

These household necessities are overpriced at the grocery store. Get them cheaper at these places instead.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

This Is the Most Popular Age for Claiming Social Security
This Is the Most Popular Age for Claiming Social Security

Both men and women are most likely to start receiving Social Security benefits at this age.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?
Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

You could save more than $30,000 by setting aside these costly expenses for just one year.

6 Things You Should Never Buy at Trader Joe’s
6 Things You Should Never Buy at Trader Joe’s

We love Trader Joe’s for plenty of reasons. But think twice about this handful of products.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have these documents that are crucial to their golden years — especially during a pandemic.

Don’t Toss These 7 Household Items — Sell Them
Don’t Toss These 7 Household Items — Sell Them

Here’s how to earn cash as you give new life to these unwanted items.

7 Unusual Ways to Declutter Your Home
7 Unusual Ways to Declutter Your Home

Tired of possessions weighing you down? Here are seven ways to declutter painlessly and effectively.

Eat This Food If You Want to Avoid Alzheimer’s Disease
Eat This Food If You Want to Avoid Alzheimer’s Disease

One type of food associated with the Mediterranean diet offers especially large benefits.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

9 Dumb Ways You Are Ruining Your Home Value
9 Dumb Ways You Are Ruining Your Home Value

Homeowners, beware these mistakes that can drive away potential buyers.

21 Things You Should Always Buy at a Dollar Store
21 Things You Should Always Buy at a Dollar Store

Dollar stores have great bargains on both everyday and occasional purchases.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

18 Amazon Purchases That We Are Loving Right Now
18 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

15 Outrageously Overpriced Products — and How to Save on Them
15 Outrageously Overpriced Products — and How to Save on Them

Retailers mark up products by hundreds of times their cost — but you don’t have to pay the premium.

Why Half of Retirees Now Owe Taxes on Social Security
Why Half of Retirees Now Owe Taxes on Social Security

Growing numbers of seniors are paying taxes on their Social Security benefits, but you might be able to avoid this fate.

11 Disgusting Household Items You Should Toss Already
11 Disgusting Household Items You Should Toss Already

Never keep these items past their prime.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.