About eight million Americans own a Long Term Care Insurance policy, according to a 2012 study by LIMRA of 27 insurers selling these plans. Who are these people, and when should LTC planning become part of overall retirement planning?
When to Research & Buy LTC Coverage?
The average aged buyer has dropped over the years. In the 80s and 90s, LTC was a topic that was mainly of interest to those retired and aged 70+. As time has gone on, insurance companies have realized there is risk in insuring those aged 70+ and has focused on pricing policies that are attractive to younger buyers. The average purchase is made at age 57, with most buyers falling into the 50-65 age ranges.
Buy Before Retirement If Possible
It makes sense for those who are pre-planning retirement to consider Long Term Care coverage. Pre-retirement is a hectic time for many who are finishing up long-time careers, but your good health and young age can both benefit you with lower premiums, which will provide savings year after year for the rest of your life. On the other hand, many wait until they are retired to do a lot of the planning that goes along with researching and buying Long Term Care coverage, and that’s okay too. The fact is, there is no right or wrong answer, every case is different.
See our tax page for full details, but some LTC premiums are actually tax-advantaged. Some states offer tax credits and there’s even a federal deduction some taxpayers are able to take advantage of when it comes time to do taxes. As a working professional, these tax advantages may make purchasing Long Term Care protection more attractive ahead of retirement.
At the end of the day, making the decision to purchase Long Term Care Insurance is about securing your financial future, so you can instead focus on the joys of retirement. It may sound cliche, but once a plan is in place, it can even free up reserves to take that mountain vacation or a cruise. With most of the cost of Long Term Care covered by insurance, you have freedom, and peace of mind.