If you’re like most people, you’ll only think about long term care when you need it. However, delaying can result in severe sticker shock when it comes time to buy a policy. The average semiprivate room in a US nursing home costs over $77,000 each year, and Long Term Care Insurance in New Jersey is a worthwhile option for many seniors. It may not be the best choice for those at opposite ends of the economic spectrum, but if you fall in the middle, it is wise to weigh the pros and cons of this type of coverage. You can discover this info here to make an informed purchase decision.
When is the Best Time to Buy?
The AALTCI, or American Association for Long Term Care Insurance, recommends that people buy policies at age 55 or even earlier. That may seem premature, but holding out may mean that you won’t qualify for coverage if your health deteriorates. The ACA bars insurers from excluding customers based on pre-existing conditions, but the bill does not cover long term policies.
Rates Increase with Age
There is another reason to be a proactive customer: Premiums increase with age. For every year over the age of 50, the annual premium can rise as much as 4%, and once a person reaches their 60s, the annual rate can rise as much as 8%. To get the same level of coverage, a person waiting until 65 to buy coverage could pay twice as much as someone who bought a policy at age 55.
Inflation is a Factor
If you decide to buy Long Term Care Insurance in New Jersey, you’ll probably pay about 20 years’ worth of premiums before needing to file a claim. However, inflation means that your policy won’t be worth as much as it is right now. Thankfully, many of today’s policies come with inflation coverage. Benefit amounts grow at a fixed yearly amount, or they compound annually at a certain percentage. Your premium will be higher if you elect to receive this benefit, but it could be a worthwhile investment.
If you decide that you need long-term care coverage, there are definite advantages to buying it earlier in life. Your chances of being approved will be higher, and your yearly rate will be lower. However, if you have a pre-existing condition, your cost and ability to get coverage will be affected.
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