Generally speaking, the younger (and likely healthier) you are, the lower your long term care insurance premiums will be. Every year you have a birthday, if you have not yet purchased a policy your premium would be higher. The older you get, the percentage of that increase becomes increasingly greater to the point where it can become cost prohibitive. If you were to purchase a policy at age 40 and pay the premium until age 85, it would cost you less over the course of your life than if you were to purchase the same policy at age 55, also paying the premium until age 85.
All insurance companies have at least two, to as many as five, underwriting categories which are categories for which an individual can qualify based on health. One of the most significant factors that effects your premium more than anything else is in which category you qualify during the underwriting process. The younger you are, the more likely it will be you will have good health and therefore qualify for paying the lowest premium based on a preferred underwriting category.
Besides age and health, the third determining factor to consider is the insurance company’s product. Every three years (on average) insurance companies come out with a “new generation” of products that can be 20-25% higher in cost than the product it is replacing. Insurance companies do this in order to remain competitive, keep up with inflation, and protect their existing policy holders (the best insurance companies have never raised premiums on their existing policy holders). Think of it in terms of an automobile…The car company comes out with a new model year of the same car, with usually only slight variations on later models, but charge more.
The best way to decide when and if long term care insurance is right for you is to get the facts from a independent broker so that you can look at all companies that provide long term care insurance in your state. Make sure that you are comparing apples to apples with regards to the benefits so that you can make an informed decision on the plan that offers the best value at the lowest premium.
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