Long-Term Care Insurance: Buy Now or Wait?

(8 of 10)

Long-Term Care Insurance: Buy Now or Wait?

Even if there is little question about affording the premiums or the need for coverage, some LTC insurance shoppers question whether they should buy just yet. They realize that buying an LTC policy while younger and healthier means a much lower premium, but they could be paying for many years before a claim is likely. Alternatively, if they wait to buy, the premium money can be invested instead, but the cost will be much higher in later years, and in the meantime, their health might change, making them uninsurable. You cannot buy long-term care insurance once you need its benefits.

The bottom line

The bottom line is that there is a good chance of incurring long-term care costs in some form at some time; and the probability of incurring the expenses increases as you age. That is precisely why LTC insurance costs less when the purchaser is young: so the company is likely to collect premiums for many years to build up reserves to meet the benefit payments.

So if you are going to buy LTC insurance at all, an open-ended delay in doing so probably is not the best choice. There is a significant chance that you will be unable to qualify later, not to mention that you might even need LTC sooner than expected. We all hope to maintain good health and independence well into old age, of course. But uncertainty in life is the reason insurance exists to begin with.