When should you buy a Long Term Care Insurance Policy?

The younger you purchase a policy the more likely that you will pay less, not only in the short term, but over the course of your life. If you have a policy and pay the premiums, you are guaranteed coverage for life. An important concern with these polices is the ability to continue to afford the policy both today and into retirement, so dealing with a company that specializes in long term care can be very beneficial.
The opportunity to purchase long term care insurance can be limiting. There are several medical conditions that disqualify individuals from obtaining this type of coverage. Most experts advise their clients to start investigating long term care insurance plans in their early 50’s. Today, the average age of a person buying long term care insurance is 57. At age 50 the premiums for long term care insurance typically increase at a rate of 5-8% per year. As a person ages, the likelihood of not qualifying for long term care increases; as an example, a 65-year-old has a 25 percent chance of not being eligible for long term care insurance.
Long term care insurance can help protect a family. If there are assets to protect, the family should take the time to visit with a long term care insurance specialist.
Ask yourself, how will you pay for a long term care event that costs $30,000 to $100,000 per year? What would that do to your families assets? Who would be your caregiver and can they afford to take the time to care for you? Many people, after looking at the statistics and the costs associated with such an event, realize the importance of such a policy sooner rather than later.
There can be several advantages for business owners. In addition to asset protection, business owners of all sizes have the opportunity to receive tax deductions on their personal taxes by purchasing long term care policies. Long Term Care Insurance is considered health insurance and taxed the same way with limitations on deductibility based on age. We encourage you to sit down with your CPA and talk about all of the tax incentives of this product.
Most companies provide payment options that allow you to pay off your policy. There is typically a “10-pay” option that usually costs four times the annual premium, but after 10 years, the policy is paid-off. Another option is a “pay to age 65.” This is a great option if you want to pay the plan off by the time you retire or if you are a business owner, this can be used as an incentive to keep a key employee. The cost of the “pay to 65” plans varies based on attained age. Either of these plans “10-pay” and “pay to 65” allow you to pay the policy off early versus until benefits are used or deceased. Once the policy is paid-off the insurance companies can not increase your premiums over time.
In summary, it is very important take the time to sit down with your loved ones and let them know your plan. Will your plan consist of a long term care policy or will you tell them that “they are your plan!”
Ask the difficult questions:
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Who will be the caregiver?
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Do you want a choice on where you will receive care?
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What assets do you want to leave your children?
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Can I afford to wait to buy this policy?
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Have you talked with friends that have experienced a long term care situation personally?
Determine how many assets you would be willing to liquidate if you have a long term care event. The fact is that approximately 50% of us will at some point need long term care. Remember, if you do not have a long term care insurance policy your choice is to pay for the care out of your own assets and self-insure.
Tom Lothrop
Western Long Term Care, LLC

Western Insurance Intro

My name is Tom Lothrop and I am the president of Western Insurance in Bend, Oregon. We are an independent agency that sells Life Insurance, Disability Income Insurance, Health Insurance, Medicare Plans, and Long Term Care Insurance products.

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Tom Lothrop
541 -390-4697