When Should You Purchase Long-Term Care Insurance?

The younger you purchase a policy, the lower the premiums will be. But if you are in your 40s, do you want to purchase insurance that you are unlikely to need for 40 years? Given the changes in the long-term care marketplace and in long-term care insurance itself over the past 10 to 15 years, it is hard to imagine what the world will look like in 40 years.

But if you wait until you are in your 70s, the premiums will be extremely high and you may be uninsurable due to health reasons. In 2008, a policy offering a $150 per day long-term care benefit for three years, with an inflation rider, cost a 55-year-old a national average of $1,578 a year, while the same policy had an annual premium of $2,998 for a 65-year-old, according to the American Association for Long-Term Care Insurance.  The Association does not even track average premium prices for 75-year-old first-time policyholders because so few qualify for coverage due to health conditions.

So, the ideal time is probably in your 50s and 60s. One approach is to see how the premiums fit into your life and other obligations. If you have children who have not yet graduated from college, they will be your major concern. You should carry enough life insurance to see them through. But after your children, if any, are on their own, you might take the funds you were using to pay for life insurance premiums and use them for long-term care insurance premiums.