Long Term Care Insurance is for care that is more long term in nature than, say, a hospital stay for a few days.
For example, it would cover you if you randomly broke your ankle or leg on some pebbles, and needed assistance for a couple of months while your ankle or leg heals. You’d likely stay in an assisted living facility while you heal, because you wouldn’t be able to take care of yourself while you are in a wheelchair.
While a couple of months is a somewhat short amount of time, another scenario would be that, in your 80s, you are no longer able to take care of yourself independently, and so you need some help on a daily basis to take care of your needs.
It can make sense to buy Long Term Care Insurance in case these types of scenarios happen for you.
When is the best age range to buy Long Term Care Insurance?
It can depend on other factors that need to be considered, but in general it’s a product to start considering in your late 40s and to purchase in your 50s.
It tends to be more expensive for women than men, because the brutal reality is that women outlive men, and while men live they tend to have a caregiver in the form of their wife.
So men very rarely ever end up using long term care.
But for a woman, it’s highly likely she will be on her own. Even if she has had children, it’s unlikely they will be able to care for her in a manner that is needed, especially if there are feeding and toileting needs (someone would need to be available to provide assistance 24/7).
So, how much does Long Term Care Insurance cost?
Well, it is less expensive for a man, but for a 55 year old man it is around $1060/year, depending on the terms of the policy (there are many options available when buying a policy, and you make the trade-offs based on the value you perceive in each option).
The same policy for a 55 year old woman?
Just like every other part of your financial future, it’s about not only taking care of your present self and family, but also your future self, especially as you get older and will no longer be able to be independent.
You want to be able to age on your terms, and to live where you want to. The only way to do that is to have the funds available. The only way to have the funds available is to save now and to have the right contingencies, such as insurance, in place.