Originally Posted by bobson
What statistic can you provide that it is 'best' to wait untl after age 45?
A combination of claims history for carriers, statistics from independent studies, and common sense about the reality of the majority of clients. But ultimately its a case by case call.
The OP was a generalized question, so it can only receive a generalized answer...
There are so many different studies out there Im not going to go find one and give a link, just google it if you want something specific, there are tons of them out there from insurance companies, the government, and independent research groups.
Read the research and make your own conclusions. Or take a CE course or two on LTC
, there are plenty of statistics on LTC
in them if you pay attention.
Major carriers claims history shows that age 59 or younger claims only account for around 5%-6%. I have been told this from carriers and wholesalers many times before.
Both independent and government studies show that the majority of LTC
claims are over age 60.
Time value of money
, compounding interest, and the proper allocation of a clients income plays a huge part in the decision as well; and is the most important thing to consider along with a clients current health and any unusual family history.
- At age 35 a client might spend $200/month for a LTC
invested for 10 years (until age 45) at 6% would be $33K in 10 years
, $107K in 30 years at age 65 (if LTC was bought at 45 and the $200 was switched to LTC premium).
- At age 45 a client might spend around $240/month for a LTC
policy. So If you had bought at 35 instead you would only have saved around $40/month.
This $40/month invested at 6% would only be $40K in 30 years.
Thats a lost opportunity cost of $67,000.
And thats only by age 65, it keeps growing exponentially..
Because of compound inflation and the time value of money the younger years are the most important times to save for retirement. Most clients are already not saving enough for retirement.
The majority of 45 year olds are still insurable for LTC
, to purchase so early for such a small price difference is irrational in the majority of cases.
would only be appropriate for someone under 45 if they had sufficient LI (term & permanent), DI, HI, is contributing at least 10% of their income to retirement savings, and has a CI policy. Only then would I usually start to recommend LTC
if there was money left over.... unless there was some unusual situation with a clients health or family history.
Again, this is all speaking in generalizations. Insurance is a case by case evaluation process.