Reasons given by clients to not purchase LTC Insurance and my responses.

"I think I will wait to purchase LTC Insurance."

There are two good reasons not to wait: 1) Most insurance carriers increase premiums significantly after age 50.  Often, premiums double from age 40 to 60 and triple between ages 40 and 70.  2) Once a medical condition develops, a person may become ineligible for coverage or, if the person remains eligible, the premium will increase as persons rated less than "preferred" pay more.

Women live about five years longer than men - to about 80 years of age vs. 75.  Women therefore may be more likely to be widowed as they age.  About 45% of women aged 65 and above are widowed, which grows to about 80% of women aged 85 and above.

Many times, women help care for their dying husbands and then must live alone as they continue to age and begin needing help to are for themselves and their homes.  In 2003, according to Census Bureau data, about half of all women aged 75 and above lived alone, while less than one in four men (22.9%) aged 75 and above lived alone.

By Joan B. Cole, Certified Senior Advisor 

Long-term care is the type of help people need when they are unable to care for themselves independently—when activities of daily life such as bathing, dressing, eating, transferring from one place to another and continence require assistance from another person. The need for long-term care can arise at any age due to illness or accident and usually means that the need for care will exceed 90 days.

Long-term care is a challenge for the entire family as they provide 85% of elder care; 25 million Americans (1 out of every 4 families) care for frail relatives. However, it is more specifically a woman’s issue.

All ages need long-term care. For persons over age 65, the odds are better than 50% or 1 in 2 that they will need some type of long-term care.

Whether home care or nursing care;

• Persons 65 years and older make up 51% of the population needing long-term care.
• Almost 40% are adults, age 18 to 64, who need care due to car accidents, strokes, brain tumors and other conditions.
• Children comprise 1% of the population needing long-term care.

Now!  One must prove evidence of good health in order to purchase individual long-term care policies so it is important that one apply before serious medical conditions occur which may render a person unable to buy coverage. 

Another reason to purchase long term care insurance at a younger age is that, as one ages, the cost of insurance increases—approximately doubling with each decade of increased age.

The ability to preserve independence and to have choices available to them is given as the number one reason by people who purchase long-term care insurance, according to the Health Insurance Association of America.  Many people also buy it to preserve their retirement income for other things besides health care expenses.

According to a Genworth Financial commissioned study, nationally, the 2005 average annual cost for a private room (single occupant) in a nursing facility was $69.400 ($190 a day).  This reflects a 6% increase over 2004 rates.

In Kansas, the annual rate for a private nursing home room is substantially lower and averages $44,000.  This is due to the fact that Kansas, Arkansas, North Dakota, Oklahoma and Missouri's non-urban areas have the lowest average annual costs in the nation.

In 2000, Medicaid, the nation’s welfare program for low-income persons, paid for 42% of home and nursing home care provided in America. Medicare paid for 15% of the $125 billion we are spending on these services, but only for short-term care called “skilled care.” Payment stops when progress toward recovery is no longer evident. The Veteran’s Administration paid for 2% and 4% was identified as “other” sources. Only 12% was paid for by private insurance including long term care insurance and 25% was paid out-of pocket by individuals.