My husband and I are in our 60s, and we don’t have long-term care insurance. It would cost us $8,000 a year at this point, and our annual income is $200,000. Do you think we should get this type of coverage?
I’m a strong proponent of long-term care insurance once a person turns 60. Prior to that age you have less than a one percent chance of spending time in a nursing home, so I wouldn’t spend a dime on it until then.
A lot of agents and companies try to sell long-term care insurance to people who are 40 or 50 years old, and I just don’t believe in that stuff. But once you hit age 60, your chances of using it increase almost daily. At that point, it’s a smart buy, and you’ll get a great return on the investment. Eight thousand dollars annually is a lot of money, but nursing home costs can run $50,000 a year.
My advice, Toni, is to buy long-term care insurance. I believe in having this type of coverage, even if you can afford to pay for care out of pocket. It takes a lot of stress and worry out of growing older. Most ladies outlive their husbands, and a frequent scenario is that the man goes into the nursing home and drains the nest egg to pay for everything. Of course, this can happen the other way around, but I’m sure neither of you wants to leave the other in a bad situation.
* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.