There aren’t many of us that would ignore the need for health insurance – whether or not there was a government mandate in place.
The reason is simple. We know that anything can happen at any time. Even if it makes sense to self-insure minor costs, we know that it never makes sense to try to self-insure catastrophic expenses such as cancer, a debilitating illness or a major accident.
This is precisely why long term care insurance is sometimes needed at young ages, and why it can pay out for years before old age. Sadly, I’ve had young clients use the long term care insurance policy that I had helped them obtain, never thinking it would be needed sooner rather than later.
We know that long term care insurance is designed to cover the extended care costs necessary when someone suffers a loss of activities of daily living or significant cognitive impairment.
Just like health insurance, which can be needed until Medicare kicks in (usually at age 65), and disability insurance, which replaces lost income due to an accident or illness, long term care insurance can be needed at any age. My colleague had obtained a long term care insurance policy for her son after college, and several years later he used the policy. A skiing accident incapacitated him for a period of time, but fortunately, he recovered. My colleague didn’t have to become his full-time caregiver while he recuperated; the policy paid for someone to help out, which allowed her to continue working full-time.
One of the most popular syndicated columnists and radio personalities, Dave Ramsey, is an advocate of long term care insurance. However, his advice is to wait until age 60 to buy the coverage…and that advice is just plain wrong. That advice to wait until age 60 before purchasing long term care insurance would not have been helpful to legendary female basketball coach Pat Summitt, who was diagnosed with early-onset Alzheimer’s at age 59. The ‘wait-until-you-are-age-60-to-buy’ also wouldn’t help younger crime victims who – like Congresswoman Gabby Giffords who was shot at age 41, survived – but can still need substantial help.
It also would be a case of too-little-too-late for the majority of people made ill by Multiple Sclerosis. That’s because most people are diagnosed between the ages of 20 and 50.
Former New England Patriots linebacker Tedy Bruschi suffered a stroke at age 32 from a congenital heart defect.
The bottom line is that we make certain assumptions about young people not needing to think about their future health, but this can be erroneous thinking.
Although the average age for obtaining long term care protection is somewhere in one’s 50’s, younger clients may want to explore a smaller amount of coverage with the thought of obtaining a second policy down the road, health permitting. LTC insurance is health underwritten; generally, it’s easier to qualify for when one is younger compared to many years into the future.
When considering smart financial advice, younger clients should keep long term care planning on their list.