As people seek to balance the potential need for nursing home or in-home care with the cost of the insurance premiums, the average age of people purchasing long-term care insurance is declining. Some young people are buying the insurance and a few of them are making claims under their policies.
Last year, 3.5 percent of individual policies were bought by people age 44 or under, according to the American Association for Long-Term Care Insurance. The youngest claimant is a young 21-year-old who bought coverage and began receiving payments under the policy at age 24; he has continued receiving benefits for seven years. The youngest female policyholder currently receiving benefits under a claim obtained coverage at age 28 and required care within the same year. She qualified for benefits that have amassed over $135,000. The association found that a number of insurers reported claims from policyholders in their 30s.
Jesse Slome, the association?s executive director, believes that these younger adults are making claims after an accident or being diagnosed with a serious medical condition that required longer periods of care.
The question becomes whether purchasing a long-term care policy at a young age generally makes sense financially? Younger people tend to qualify for coverage more easily and pay lower premiums. For example, a policy with $164,000 in total benefits with the option to increase coverage in the future, costs roughly $635 annually ? or $53 a month ? for a 25-year-old.
Due to the difficulty predicting whether premiums are affordable over a very long period of time, Enid Kassner of the AARP?s Public Policy Institute cautions people in their 20s and 30s who are considering purchasing the insurance. She warns that it?s not for everyone, and that most policyholders don?t use their benefits until they are in their 80s.
If young policyholders decide later that they can?t afford or don?t want to continue the insurance, all of the premiums they paid will have been wasted since they don?t accrue to your benefit the way they might with other kinds of life insurance.
Also, few long-term care policies sold today provide lifetime benefits; typically they are structured to provide certain benefits over a certain period of years. A young person that files a claim due to an accident or illness won?t necessarily be covered for the rest of his or her life.
Read More: Does Long-Term Care Insurance at a Young Age Make Sense?
Attorney Christopher J. Berry is a Metro Detroit estate planning and elder law lawyer who helps families, seniors, veterans and business owners with their important legal needs. Oakland County estate planning lawyer, Christopher Berry is a partner in the Bloomfield Hills law firm of Witzke Berry PLLC. Mr. Berry practices in the areas of estate planning, business, probate, veterans benefits & Medicaid planning. Follow Christopher on Twitter @chrisberryesq
Source: http://michiganelderlawcenter.com/does-make-sense-purchase-longterm-care-insurance-before-turn/
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