Insuring That You'll Be Cared For
You should buy LTC between the ages of 50 and 60. Get a premium you can afford at the time of purchase and for the next 20 years. It makes no sense to pay $3,000 a year for a policy if eventually you have to drop it. So buy a policy you'll be able to afford into your mid-80s (the average age of entry into a nursing home). Next, choose a company that has been offering this kind of insurance for at least 15 years and has a rating of A or better (like John Hancock and Genworth). Make sure you choose a zero-day elimination period, which means your coverage will begin on the first day you need care; a 90-day elimination period means that you or your family will have to pay out of pocket for your first three months of care.
Because healthcare costs are rising at an alarming rate, you'll also benefit from choosing "inflation protection," whereby your policy increases your benefit payout by a compounded 5 percent annually. And because the average stay in a nursing home is less than three years, you should choose at least a four-year benefit period that also covers at-home care. You may be able to save by purchasing LTC insurance through work or at a spousal-partner discount.
I know, I know—you think, "I'll never end up in a nursing home". Well, as with all insurance policies: I hope you'll never need to use any of them, but if you do, they sure are nice to have.