Just How High is the Cost of Waiting to Buy Long Term Care Insurance?

LTC Tree released a new chart of data today exemplifying the high cost of waiting to plan for long term care. Purchasing a long term care insurance policy can help people avoid exhausting all of their retirement assets to pay for care later down the road, but getting an affordable policy is largely based on when it is bought.

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Atlanta, Georgia (PRWEB) January 31, 2014

As Baby Boomers retire en masse on a daily basis, retirement planning has become a hot topic of discussion. The cost of healthcare continues to rise and more people are delaying retirement to save more money, but there is one area of retirement planning people always seem to forget, and that is long term care.

Putting off planning for long term care can be a costly mistake, warns long term care insurance marketplace LTC Tree. A recent analysis of premium rates found that waiting to buy long term care insurance even just a few years can seriously cost consumers.

LTC Tree released a new chart of data today exemplifying the high cost of waiting to plan for long term care. Purchasing a long term care insurance policy can help people avoid exhausting all of their retirement assets to pay for care later down the road, but getting an affordable policy is largely based on when it is bought.

Long term care insurance helps cover the cost of services received for different types of care in assisted living facilities, nursing homes, and in-home care. Buying a policy effectively shifts the risk to the insurance company and ensures the policyholder won’t be forced to cover the entire cost, which can be staggeringly high, on their own.

According to a leading insurer, the average cost of a nursing home in the United States now hovers above $83,000. Investing in long term care insurance at a young age while still healthy can help save a significant amount of money on premiums, and LTC Tree’s new chart shows just how much can be saved by buying early.

The chart uses data based on an average 55 year old woman applying for a policy and details the increase in cost of premiums that occurs over time. If the woman were to wait several years, the cost of a policy grows rapidly, because the insurance underwriting is mainly based on age and health. Waiting even just a couple years can cost buyers tens of thousands of dollars in extra premiums, and waiting until age 65 can cost nearly a hundred thousand dollars.

Another advantage of buying a long term care insurance policy early is the fact that with compound inflation protection, an optional rider recommended by LTC Tree, the value of the policy benefits increase more over time. Waiting several years to buy a policy increases the chance that there won’t be as much time to watch the benefit amount increase as substantially.

Darrick Wilkins, president and founder of LTC Tree, says “the most important reason to buy LTC insurance now is if a person waits five years to buy it, they will go through 3-4 generations of new product roll-outs.”

Wilkins explains how “the insurance companies will launch those new products every 12-18 months that always cost about 10-20% more each time a new product is launched. Couple this fact with the others mentioned and it could cost the person more than double in premiums paid in the end just because they waited a few years.”

LTC Tree has years of experience helping consumers find the best benefits for the lowest rates, and they recommend people begin looking into policies in their 40s and buy in their early 50s. This new chart can help people decide the best time to buy in order to save the most money. You can view the chart here.

LTC Tree is an Atlanta-based nationwide network of licensed agents whose goal is to help educate people about their long term care insurance options with no face-to-face sales meetings. We help clients shop all the major companies to find the best plan at the best price and strive to give consumers a laid back, no pressure process of buying insurance.


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