Margie Barrie, a veteran long-term care insurance agent, marketer and educator, has been writing articles about long-term care planning and related issues for years.
Here, she takes a question about clients who are wondering when they should buy LTCI.
Question: I’m working with a number of clients in their 40s. They ask me: “Does it make sense to buy long-term care insurance now, or should we wait?” What should I advise them to do?
Answer: One of the secrets in this industry is what I call “the high cost of waiting.” It means that the younger you are when you purchase the policy, the less you will pay over the lifetime of the policy.
I too am working with younger clients. I just provided coverage to Bill, a policeman in his 30s. He saw one of his co-workers get shot; he will now be in a wheelchair for the rest of his life.
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Here’s a good guideline to use. It may vary by specific policies, but overall if you are 45 years of age now, and you wait 20 years to buy a policy, until age 65, it will be about 3.5 times more expensive – 3.6 times to be exact.
There are two reasons for that. First, because the premium is based on your age at time of application, since you are older, it will be higher. And second, you will need to take a higher daily benefit to keep pace with inflation.
For a guide to how to talk about this with the clients, read on.
Especially in the long-term care insurance market, the early bird gets the deal. (Image: Thinkstock)