The first time that Her and I heard about long-term care (LTC) insurance was about 5 years ago on an episode of Susie Orman. LTC insurance pays for stuff like nursing homes to at home care, depending on the plan. Since then we’ve always had it in the back of our minds, especially when we thought about how our parents would take care of themselves. For us though, since we were only puppies in our mid-20′s then, we didn’t give it much thought.
So when Her emailed me one day telling me that her employer is offering a group LTC plan, I was not ready to make a decision about it. Much of the information floating around on LTC assume that people will start shopping for this around the age of 50. We’re more than 20 years from that, so are we crazy for making this decision now?
Some Google-fu revealed that premiums for 50 year olds can start at $2400 per year and increases from there. Right now we can choose from one of two plans. In the first, we’re being offered premiums that start at $200 per year for adequate coverage of up to $150 per day for a lifetime benefit of $275,000. Every 3 years we’re offered the chance to increase the coverage with an accompanying increase in premiums. We can choose to decline, but must wait another 3 years to increase the benefit.
This plan differs from the automatic benefit increase, in which we pay a flat rate premium of about $840 per year for the life of the plan. The upside is that the benefits increase 5% compounded each year. The downside is that this cost for us right now will make achieving some of our other goal a little more difficult.
After reviewing the plans, I think that it wouldn’t be a bad idea to sign up. I was looking at the first option to keep the premiums low for now and for an option to increase our coverage, and therefore premiums, over time. At $200 per year, this is an easy expense for us to handle. Heck, we’ve spent more in one night FOR DINNER.
What do you think? Are we too young to worry about LTC insurance?