Long Term Care

Do I really need Long Term Care Insurance?

Did you know?

Did you know, you have a 1 in 1200 chance of a house fire?
-Usually your homeowner's policy covers this.

Did you know you have a 1 in 240 chance of a major automobile accident?
-Fortunately your automobile insurance covers this.

Did you know you have a 1 in 15 chance of a major medical expense?
-Our health insurance covers most of this.

Did you know you have a 1 in 2 chance of needing long term care after you reach age 65?
-How will you pay for this??

Well, lots of people will say, "Why buy now?" Or, "I'll wait until I'm older."

The truth of the matter is: If you buy now it will cost you less!

Let's look at the numbers:
Fred, at age 30, wants a plan that will cover 2/3 of the nursing home expense, so he purchases a $90 a day plan with inflation protection. He figures he can self insure for the other 1/3 of the expense. His yearly cost today is $440 (about $36.67 monthly).

Fred decides to wait until he is 40 years old to purchase a LTC policy. But, 10 years later, 2/3 coverage is now $150 because of the inflation factor. Fred is now also 10 years older. His yearly premium in 10 years will be $733 (about $61.08 a month).

At age 50, Fred finds out that 2/3 coverage is now $250 a day, plus he is now 20 years older and is at greater risk to the insurance company. In 20 years, at age 50, Fred will pay a yearly premium of $1,632 (about $140 a month).

At age 80, if Fred purchased LTC Insurance at age 30, his total premium paid would amount to $440 x 50 years = $22,000.

At age 80, if Fred had purchased LTC Insurance at age 40, his total premium paid would amount to $733 x 40 years = $29,320.

At age 80, if Fred had purchased LTC Insurance at age 50, his total premium paid would amount to $1,682 x 30 years = $50,460.

So, which is the better way to go?

*Buy later and pay a higher premium and possibly be not insurable because of your health conditions at a later date...
*Buy now when you are younger, healthier, and can afford the lower monthly premium payments...

We, at PGA think the answer is obvious.

Questions?

Call Peter George & Associates

Contact PGA at 602-527-5422

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