Is Long Term Care Insurance A Wise Investment?

One of the most common objections to investing in LTCi is that some folks feel that they will probably never use the policy since they are in pretty good health now, and they don't want to waste money on something that will never actually be put to use.

So a good question to ask is: What evidence is there that LTCi is a wise and sound investment?

To answer that question, consider this:

· Would you consider auto liability insurance a wise investment for a person that has assets that need protection? If so, why?

Isn't it because a good auto liability policy can help protect against financial ruin in the case of a major accident? Now we aren't talking about minor fender benders here. Even though they can cost a few thousand dollars to repair, the real threat to a person's financial assets would be a major accident where individuals are seriously hurt and may require extremely expensive medical treatment, perhaps even for a long period of time. Such treatment can cost hundreds of thousands of dollars, and so it is clear that a comprehensive auto liability policy can help protect against such a major financial threat.

Do you have such an auto insurance policy for each vehicle you own?

· Would you consider having a home owners insurance policy a wise investment? If so, why?

Isn't it because a good home owners policy can help protect against major damage to your home from fire, flood, and other disasters? Since a person's home is often their most valuable physical asset, it only makes sense to protect yourself against financial ruin that could arise if you had to pay to completely replace your home after a major catastrophe. Such an expense could easily cost hundreds of thousands of dollars.

Do you currently have home owners insurance?

If you see the wisdom in investing in both an auto and home insurance policy, what are the odds that you will have to use either of them to protect against a major financial threat in your lifetime? One in a hundred? One in fifty?

Well, according to the U.S Department of Health and Human Services, the facts are that the odds that a person that is now 65 years of age will need some form of long term care is very significant. Here is a quote from their website: "About 60 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. Over 40 percent will need care in a nursing home for some period of time.....It is difficult to predict how much or what type of care any one person might need. On average, someone age 65 today will need some long-term care services for three years. Service and support needs vary from one person to the next and often change over time. Women need care for longer (on average 3.7 years) than do men (on average 2.2 years). While about one-third of today's 65-year-olds may never need long-term care services, 20 percent of them will need care for more than five years."

Since a three year stay in a nursing home fifteen years from now will most likely cost just under a million dollars for a couple age 65, it can spell financial ruin for many folks who have worked hard to save carefully all their lives.

Now consider that if you can see the wisdom in investing in auto and home insurance in order to protect your financial plans and goals, doesn't it make sense to complete the circle of financial asset protection by adding long term care insurance, since the odds of your having to use it at some point in your life is so much greater than almost any other kind of insurance you may own?

If so, keep in mind that you can't get auto insurance to cover a major accident AFTER the accident has already happened, if you didn't have the insurance beforehand. Likewise, you can't wait to invest in home insurance until your home is actually on fire and burning down, and expect to be covered.

In a similar vein, the time to invest in LTCi is when you are healthy enough to be able to qualify and keep the rates low.