Don't Insure on 1% Chance

Dear Dave,

I'm 54, my husband is 56, and we still have three teenagers at home. Recently, we were told that it's the perfect time for us to buy long-term care insurance. What do you think about this idea?

Terri

Dear Terri,

My guess is that you were advised to buy this by someone who sells insurance. I'd also call this a conflict of interest!

If you'll do a little bit of research, you will find that there's about a one percent chance of folks your age needing long-term care insurance. So no, it's not the perfect time for you guys to do this. I don't insure things that have such a miniscule chance of happening.

Once you turn 60, the chances of something unfortunate happening rise practically every day. That's why I advise people to start shopping for long-term care insurance on their 60th birthday, regardless of their income or assets. Think of it as a gift to yourself and your family. Nursing home care can run anywhere from $30,000 to $50,000 a year. That will crack and scramble most people's nest eggs in a hurry!

Do you want long-term care insurance? Absolutely. But my advice is to wait until you're 60 years old.

-Dave

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