When you should purchase long term care is dependant on several factors:
1. age
2. income
3. likelihood of need
Likelihood of Need
One of the factors that determine when and even if you need to purchase long term care insurance is the likelihood of ever using it. If you have a family history of need for long term care, then by all means, when you are in a financial position to do so, buy the insurance.
After assessing the odds that you will need long-term care, it is important that you stringently analyze the reasons for a policy and the ability to pay for it for the balance of your life. It makes no sense to buy a policy unless it can be paid for every year until death. Far too many policies are cancelled by policyholders on fixed incomes as they grow older and their premiums increase accordingly. So, take this into account.
A long-term care insurance policy is not for everyone. However, for a limited population, long-term care insurance makes sense. Age is a factor in whether or not you need a long term care policy, and will be part of the determining factor of when to buy it. Like any other insurance type, you cannot buy it after the need arises, so your age should be a primary consideration. Although the need for long-term care can arise gradually as a person ages and needs more and more assistance with activities of daily living, for most a stroke or a heart attack will be the precipitating need. And even then, long term care is not always needed. Often those with acute illnesses may only need nursing-home care for a matter of months, while others may need care for years. So, your job is to determine the likelihood for you.
Studies point out the likelihood of needing such care, and for many this is not an insurance type to consider without real reasons, like family history. In one study, it is anticipated that 43% of those who turned age 65 in 1990 will enter a nursing home at some time during their life. Of those who live to age 65, nearly 1 in 3 will spend three months or more in a nursing home and 1 in 4 will spend one year or more in a nursing home. Only 1 in 11 will spend five years or more in a nursing home. So, really it is like 10% need long term care insurance.
So, if you think you might fall in that ten percent, buy long term care insurance when you can. Buying long-term coverage should not cause financial hardship and force you to forego other financial needs. Thus, only buy it when you are in a financial position to do so. To determine when purchasing long-term care insurance is appropriate often requires a full financial analysis. For many people it is not a good idea ever, so discuss it with your financial planner.
When you buy your policy remember this: buying a policy is a function of your age, health status, overall retirement objectives, income and wealth, so all need to be considered. If your only source of income is a minimum Social Security benefit or Supplemental Security Income (SSI), do not purchase a policy. If paying utilities, food or medicine stretches your budget, then you should not purchase a policy. In all honesty, long-term care policies are only for people with significant assets they want to preserve for family members, to assure independence and not burden family members with nursing home bills. Never buy a policy if paying the premiums will be a problem.