Should I purchase long-term care insurance and if so, when?
Answers | 2
Your questions was whether you should purchase a long term care insurance policy or not, and if so when. Unfortunately the answer is not a cut and dry, yes or no. There are many factors such as your current age, life expectancy, personal and family health history as well as your anticipated retirement expense needs compared to your current and projected retirement funds nest egg. However, it is a fact that 70% of individuals over the age of 65 will need long term care at some point in their lives. If you fall into this category than the benefits of the policy will far outweigh the policies expense. That being said, Long Term Care policies can be very expensive, and (if self insurance is not an option) should be purchased when you are younger, in order to spread the cost out over a longer time period, therefore decreasing the premiums to a more manageable amount.. However, if you do purchase a policy i would urge you to inform your CPA or EA of the purchase due to the policy premiums being federally deductible up to IRA mandated limits, and possibly deductible in your state as well. I would urge you to seek the council of a financial planner who can analyze your financial situation and run a cost-benefit analysis for your personal situation in order to determine if self insurance is a viable option, and if not, he/she can help you obtain the Long Term Care policy that will fit your needs.
Always do what is in your best interest. Perhaps a better question could be; can you afford LTC insurance? Keep in mind that there are various versions of LTC, CCI, etc. So, choose wisely.
The best way to determine what you can afford is to know your financial number and have the cash flows to enjoy your lifestyle.
A LTC policy needs to have the funds to cover the costs for your life expectancy. We get lots of calls from folks who HAD a policy for 5-10 yrs and stopped paying for it because 1. They could not afford to keep paying for it. Or, 2. They were healthy and felt it was not necessary but now they need it.
Feel free to contact us directly to discuss your situation in greater detail. There is not one size fits all. No obligation.
It's not what you make, It's what you keep that determines your lifestyle.