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Long term care Insurance: For whom doth the bell toll?

I was approached one day by a huckster for long term care insurance and they dutifully pulled out their prize turkey for all to view: 

“A common misconception about long-term care is that it is just for the elderly. However, anyone of any age or occupation may need long-term care at any time and for any length of time.”  ~ Barbara Huguenin’s article in theFebruary 23, 2010  Idaho women’s Journal  (yes, she was selling *gasp* long term disability insurance)

Wow!  I thought that sounded dire indeed.  Was I missing something? Should I be concerned (at 40) about buying such insurance?

But then she immediately showed her hand by rolling out references to Christopher Reeves and Michael J Fox. and then proceeded to dutifully sound the “dire emergency” alarm bell by stating that there are “thousands” of others in the same situation that we’ve never heard of…

Really?  Thousands?  That’s a lot of people…  Oh wait,  there’s Billions (with a B) of people on this planet, so thousands?  

But there’s more… A definitive statement follows:  “Age is NOT a factor!”

Joy!  I’m saved!  This lady must have found a way to bend time and space, altering our very reality!  

Oh, wait! That was my Sci-Fi show…  No, this snake oil saleswoman hasn’t found out anything new, even her sky-is-falling pitch has been used by every hard-up politician running for office for ages.

So where does this leave us?  What is the truth?

That Huckster piqued my interest, so I did a little research to see where the facts lie and this is what I found:

Here’s what Consumer Reports uncovered about the ideal age at which to buy:

  • 40 -There is very little reason to buy a plan at this age. Although premiums are lower, you will spend more over time. Plus, there is no guarantee the premiums won’t rise.
  •  50 -Begin deciphering the fine print of various long-term-care options to see if a policy makes sense for you. Consider any health problems you have and how long your relatives tend to live. And evaluate the importance of leaving assets to heirs. 
  • 60 -For many people, this is the best decade to sign up. According to Consumer Reports: “The average age at which most people sign up for LTC coverage is 61. If you wait much longer, you run into insurability and affordability issues. For example, 23 percent of policy applicants in their 60s don’t pass the required physical, and 45 percent of people in their 70s fail.”

~Taken from http://www.usnews.com/money/blogs/planning-to-retire/2008/09/02/the-best-age-to-buy-long-term-care-insurance

Also, the NAIC (National Association of Insurance Commissioners) has a few cautions as well: http://www.naic.org/documents/consumer_alert_ltc.htm

In short:  Age is most definitely part of what needs to be considered carefully, along with many other factors.  Careful consideration and getting multiple second opinions will save costly mistakes.

Just a thought: The actual percentages of people needing long term care for other than age-related deterioration are so extremely low as to present no meaningful benefit other than to line the pockets of Insurance companies needlessly.  Do your own research in places that do not stand to gain from the advice given to you…

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