Waiting On Long Term Care Insurance Can Lead to Decline

If you wonder when is the best time to plan for future declining health and aging, the answer is simple. Before your health changes and you get too old.

You never know when your health might change, and you will need help with everyday living activities. Will you have mobility problems or dementia? When you do need long-term health care will you have enough resources to pay for the quality care you deserve?

Inflation and economic conditions also change. Being prepared to have enough resources to access the care you will need is vital to any retirement plan. For many people, Long-Term Care Insurance is an affordable option. But when you pull the trigger and get a policy?

Earlier the Better

When experts suggest you obtain Long-Term Care Insurance coverage when you are younger, they are not exaggerating. If you wait until you are after age 60, you have a substantially higher chance of being declined for coverage, according to a report from the American Association for Long-Term Care Insurance (AALTCI), a national consumer advocacy and education group. 

Individuals who want Long-Term Care Insurance protection must health qualify, and our health generally gets worse as we get older. 

 Jesse Slome, AALTCI's director

However, many consumers want to wait. Even Dave Ramsey, a famous radio host, and financial consultant, suggests waiting to age 60 despite being a big believer in Long-Term Care Insurance. But is age 60 too late?

Probably. Not only is Long-Term Care Insurance more affordable when you purchase a plan in your 40s or 50s, but your health will also be better. Your reasonably good health gives you the ability to plan in the first place.

Lessons from the Virus Crisis

The virus crisis has significantly impacted the elderly and those with pre-existing health conditions. It has created a "tipping point," pushing people into an extended care situation sooner or requiring a person to obtain a higher level of care.

These unexpected events make planning for aging and longevity even more critical. 

Chance of Coverage Decline Increases With Age

For those aged 75+, the report indicates the underwriters reject 51.5% of all applications due to the health or memory problems of the applicant. Forty-four percent of applicants ages 70 to 74 get declined for coverage. For ages 65 to 69, 32.5% see their applications rejected.

These numbers do not reflect the number of applications approved but received a more expensive rate class due to their health.

This is something you clearly have to do well before turning 75.

Our advice is to look into this coverage between the ages of 55 and 65. Once people get onto Medicare, they often take advantage of all the health screens that Medicare pays for, and while those are great, they can uncover health issues that can prevent you from qualifying for Long-Term Care Insurance.

Jesse Slome

LTC Insurance Specialists Recommend Acting Before Retirement

Many Long-Term Care Insurance specialists suggest obtaining coverage in your 40s or 50s to take advantage of much lower premiums and good health discounts. Today, most people purchase coverage in their 50s. 

In addition, some insurance companies consider some family history into account when underwriting an application. Some of that family history may not yet have occurred when you apply for your coverage when you are younger.

For example, if you are 60, your parents, if living, are in their 80s. Whether they are living or not, they have experienced a lot of health conditions, and some of those could impact the underwriting of your policy.

While most people saw their applications approved, even younger consumers saw their applications declined or rated due to current health or family history. The report showed that only 16% of applicants aged 49 or younger were declined. Twenty-one percent saw their application rejected for those aged 50 to 59.

Long-Term Care Insurance decline rates increased slightly from the last time the AALTCI compiled data in 2014.

There little attention paid to educating consumers about the age to start investigating Long-Term Care Insurance as an option to cover potential risk of needing care at home or in a skilled nursing facility.

Jesse Slome

Underwriting Criteria and LTC Insurance Premiums Vary 

The underwriting criteria vary between insurance companies, as do the premiums. Premiums are based on age and health at the time of application, in addition to other factors like the total amount of benefits you wish to have and family history.

An experienced Long-Term Care Insurance specialist will generally ask many detailed questions about your health, family history, retirement goals, and other factors to match you to the right insurance company.

LTC Insurance is Affordable - But You Better Shop

Premiums can vary dramatically, even for the same coverage. The variance can be over 100% between insurance companies. This is why it is essential to use the assistance of a Long-Term Care Insurance specialist in researching, designing, and shopping for the right coverage at the best value.

Planning for the financial costs and burdens of aging is an essential part of your overall retirement plan. Start your research early, well before you retire. You can use the resources available on LTC NEWS to assist you in your research.

Remember, the need for long-term health care can happen at all ages, but the risk increases as you get older. People require care services due to an illness, an accident, or the impact of getting older. An affordable Long-Term Care Insurance policy will safeguard savings and income. It will also give your loved ones the time to be family and not your future caregiver.