Cost of long-term-care insurance going up, but it’s still a wise investment, depending on your income

Judy Witte says her long-term-care insurance premiums
are going up at a worrying rate. C-J photo by Matt Stone.

Seniors are facing increases in their premiums for long-term-care insurance as insurance companies scramble to deal with increasing longevity of seniors and low interest rates that are “crimping investment returns,” Chris Otts reports for The Courier-Journal.

Louisville retiree Judy Witte, 72, said she received a letter from her insurance company recently saying her premiums will go up by 77 percent, from $986 to $1,746 per year.

Her situation is part of a larger trend in which the cost of an average policy has increased by 6 to 17 percent from 2011 to 2012. Long-term-care insurance helps pay for the cost of assisted living, nursing homes, hospice care and home care.

In the Louisville area, assisted living costs about $45,000 per year and nursing homes cost about $72,000 per year and more.

People should buy long-term-care insurance if they can’t afford the care they might need without dipping into their savings, Otts reports. “For example, someone who receives $100,000 a year in retirement income but spends only $30,000 might be able to afford an assisted-living center or nursing home,” Otts notes. But if that same person spends $80,000 a year, then it would be a wise investment to buy long-term-care insurance because they would not be able to afford the assisted living or nursing home costs.

The right time to buy long-term-care insurance is between age 50 and 60. If Witte had waited to buy hers today, it would have cost her more than $26,000 a year, Otts reports. “To me, it’s a precious possession,” she said. “It helps me sleep at night to know I have this.” (Read more)

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2 Replies to “Cost of long-term-care insurance going up, but it’s still a wise investment, depending on your income”

  1. Albert Segal

    The costs of long term care services depend on the type of information on long term care, the amount of care you need, the provider you use, and where you live. However always expect the rates to be higher than what you have expected. There's no exception, whether you are rich or poor the rates for this care are always daunting.

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