Most Americans will need long-term care at some point, but according to the insurance research company LIMRA, only 3% Americans over the age of 50 have long-term care insurance.
Among people age 65 and older, 14% will eventually have to pay more than $100,000 out-of-pocket for long-term care (LTC) services—which Medicare typically doesn’t cover.
And the longer you wait to invest in LTC insuranceIt is equally difficult to avoid out-of-pocket costs.
This brings us to a recent question from a Money Talks newsletter subscriber.
Bill M. asked Money Talks News:
“I would like to know about the best insurance companies that provide long-term care insurance for individuals over 70 years of age.”
We cannot recommend specific insurance companies, as we do not know all the details of Bill’s financial and health situations. But we consulted financial experts for advice on long-term care insurance at Bill’s age.
Here’s what he had to say.
Don’t expect it to be cheap or easy
According to certified financial planner Josh Brooks, purchasing long-term care (LTC) insurance in your 70s may be difficult, but it’s not impossible. exponential advisor.
“The most important factor in the price of long-term care insurance is the age you buy it,” Brooks told Money Talks News. “The premium for a 70-year-old will be significantly higher than someone buying a policy at age 50.”
However, this assumes that the insurer is willing to offer you coverage.
According to the American Association for Long-Term Care Insurance, your chances of losing long-term care insurance increase with age. In 2019, 44% of applicants were aged 70 to 74. rejectedAnd 51.5% of those age 75 or older were rejected.
The older you are, the more likely you are to have pre-existing conditions, which can make it harder to get approved for standard LTC insurance policies.
“Purchasing long-term care insurance at age 70+ will be difficult and expensive,” says certified financial planner Bill Shafransky. Monaco Consultant. “That type of insurance is outlined with strict health guidelines, as the insurance carrier assumes the possibility of paying higher costs of care, which typically occurs in someone’s early 80s.”
“[F]or most companies that sell traditional policies you have to be a model of health to get approved,” Shafransky adds.
According to the American Association for Long-Term Care Insurance, certain health conditions will make it “impossible” to get approval. They include Including but not limited to memory loss, kidney failure and liver cirrhosis.
However, if age and health don’t work in your favor, there are other options.
consider alternatives
Brooks shared some alternatives to traditional policies that someone in the bill dilemma might consider:
- hybrid policies: These combine life insurance or annuities with long-term care coverage. They are often easier to qualify for than traditional long-term care insurance. A major advantage is that even if you never need care, your beneficiaries receive the death benefit.
- short-term care plans: Brooks says these policies provide coverage for a limited period of time, usually about a year. Medical underwriting is usually more generous, and can help protect your estate from the cost of brief but intensive care.
- paying out of pocket: This involves covering care costs directly out of your personal assets. This takes significant savings and deliberate planning, but it gives you the greatest control over how and where you get care.
Another option are long-term care annuities.
Ultimately, everyone’s situation is different, so meeting with a professional may be helpful.
Other advice
Say, there are a few questions you should answer before you start shopping Harold ZazulaA certified financial planner with certification in long-term care.
“Before tackling how to finance long-term care, it’s essential to know what type of care you want, where and from whom. Then build a funding plan around that, with LTC insurance being a potential component,” Zazula told Money Talks News.
Zazula and other experts shared the following tips to keep in mind when navigating LTC insurance:
- Set realistic expectations about your health, your family’s medical history, and how it will affect your insurance.
- Calculate your retirement budget and then estimate what you can add to your monthly payments.
- Shop around for policies instead of looking at just one option.
- Read the fine print before signing anything. How much will these policies cover per day and for how long? Does the coverage protect against inflation? Know the details.
- Learn the difference between traditional, hybrid, and chronic care riders.
- Understand how claims are paid, and what the difference is between reimbursement and indemnity.