Nearly half of applicants over age 70 are unable to qualify for traditional long-term care insurance. This is just one of the many reasons to consider purchasing an insurance policy as early as possible.

In this week’s Money Wisdom Question Series, Heath Grossman, CFP® explains the purpose of buying long-term care insurance and why delaying could limit your options and even increase your costs.

The Purpose of Long-Term Care Insurance

Having a plan to cover long-term care services is not necessarily about receiving care. A long-term care event could pose a significant threat to your savings if you haven’t prepared. That’s why the decision to purchase insurance is ultimately about protecting your assets — for yourself and your loved ones.

Benefits of Buying Coverage Sooner

Most people who purchase long-term care insurance do so between the ages of 50 and 60. Insurance companies base your premiums on approved rating factors, including your age and health status when you apply. When you’re younger and in better health, you have a better chance of not only obtaining coverage but also doing so at a lower cost.

If you’re ready to discuss your options, don’t wait too long or you could face increased premiums and even denial of coverage. Planning earlier also offers more options for policy types and coverage levels.

Key Factors to Consider Before You Buy

Before choosing a policy, it’s important to consider your personal and family health history. These factors can affect your eligibility, especially if you have any pre-existing conditions. Another consideration is your employment status. Do you earn enough income to help cover costs or would you be dipping into your savings to pay?

Lastly, consider what type of insurance would be right for you. Options include traditional long-term care insurance policies and hybrid long-term care plans with life insurance benefits.

Ultimately, you want to balance the cost of long-term care insurance with your current financial picture. Discussing your coverage options with your advisor can help you gain a clearer perspective on when to purchase and how much to spend.