Page 55 - Growing Old Without a Plan for Long Term Care is not for Sissies_Neat

Do I Have to Decide Now? 37 Since initial premiums are attained age based, each year you wait to purchase your policy increases the cost of the policy. This assumes you just purchase the same amount you would have purchased at an earlier age. In addition to the higher premium charged when you purchase at an older age, each year you wait the amount of daily beneft required to pay for your care increases–at about 5% per year. So just to keep pace with infation, you must purchase a larger beneft than would be necessary if purchased at a younger age, assuming you would have purchased infation protection at that time. I’ve included some examples at the end of the chapter that show the cost of waiting for three different age groups. These examples assume that you could get a 6% secure rate of return on the premi- ums you saved by waiting, and that you are in a 25% tax bracket. Assuming you are able to wait until age 85 before needing long term care, the net cost of waiting ranges from $25,000 to $42,000. This is even before considering the risk of higher premiums you face because of changes in your health before applying for coverage. Summary: As I said before, Long Term Care Insurance is not for everyone. But if you’ve made it this far and have decided that it needs to be a part of your plan for long term care, please don’t delay. You can ask almost anyone who has purchased Long Term Care Insurance in the past few years when the best time to buy is and they will tell you they wished they had purchased it earlier.