Here's some more info on long-term care insurance, a retirement planning tool that is worth considering.
Jesse Slome, who is executive director of the American Association for Long-Term Care Insurance, a trade association whose members are long-term care insurance salespeople, commented on yesterday's blog about the rising cost of long-term care.
I said it was expensive for people living in retirement. He took exception, pointing out that compared to the $233,00 that the average three-year stay in a nursing home costs, the price of insurance -- about $4,000 per year for a couple in their 50s -- is modest.
The problem, he says, is that people look at long-term care insurance the wrong way. It's not an investment -- it's insurance -- and as he points out, you're unlikely to complain about not getting your money's worth from homeowners insurance because your house didn't burn down.
If you're thinking about buying long term-care insurance, don't dawdle. The older you get the more likely it is that you won't be able to buy it because of your health. Before an insurer will sell you a policy, you'll almost certainly be required to have a physical and the list of ailments that will result in your being declined varies from one insurer to the other. But overall, Slome says these are the average rates of decline:
- Ages 70 to 79 -- 45 percent of applicants are declined.
- Ages 60 to 69 -- 23 percent are declined.
- Ages 50 to 59 -- 14 percent are declined.
No insurer will write a policy on you after you turn 80.
Here are a couple of other interesting tidbits Slome offered:
- If you can qualify for a good-health discount initially, it will lower your rates permanently -- even though down the road, your health declines.
- More than 70 percent of people who buy long-term care insurance are married. If that's your situation, shop around because some insurers offer discounts as high as 40 percent per person for married couples. That means that the second person pays only 20 percent of the total premium.