In Your 70s and Looking for Long-Term Care Coverage? Not Impossible, Experts Say

Financial professionals explain what to expect, and what alternatives exist, when shopping for long-term care insurance in your 70s.

Most Americans will need long-term care at some point, yet only 3% of people over age 50 have long-term care insurance, according to research firm LIMRA.

For adults 65 and older, 14% will eventually face more than $100,000 in out-of-pocket long-term care costs — expenses that Medicare generally does not pay for.

Waiting longer to buy coverage also makes it harder to avoid those costs.

That leads to a question from a Money Talks Newsletter subscriber.

Bill M. asked Money Talks News:

“I would like to know the best insurance companies that offer long-term care insurance for individuals over 70 years old.”

We cannot recommend specific insurers because we do not know the details of Bill’s finances or health. However, we asked financial experts how to approach long-term care insurance at that age.

Here is their advice.

Expect higher costs and tougher approval

Buying long-term care insurance in your 70s can be difficult, but it is not necessarily out of reach, according to Josh Brooks, a certified financial planner with Exponential Advisors.

“The most significant factor in the price of long-term care insurance is the age you buy it,” Brooks tells Money Talks News. “Premiums for a 70-year-old will be significantly higher than for someone who bought a policy in their 50s.”

That is assuming an insurer is willing to issue a policy in the first place.

According to the American Association for Long-Term Care Insurance, denial rates rise with age. In 2019, 44% of applicants ages 70 to 74 were denied, and 51.5% of applicants age 75 or older were denied.

Older applicants are also more likely to have medical conditions that make it harder to qualify for a standard LTC policy.

“Buying long-term care insurance at age 70+ is going to be tough and expensive,” says Bill Shafransky, a certified financial planner with Moneco Advisors. “That type of insurance is underwritten with strict health guidelines, as the insurance carrier assumes a probability of paying the high cost of care, which usually occurs in somebody’s early 80s.”

“[F]or most companies selling Traditional policies, you have to be a specimen of health to get approved,” Shafransky continues.

The American Association for Long-Term Care Insurance says certain conditions can make approval “impossible,” including memory loss, kidney failure and liver cirrhosis.

If age and health make traditional coverage unrealistic, other paths may still be available.

Look at alternatives

Brooks pointed to several options beyond traditional policies that someone in Bill’s position could consider:

• Hybrid policies: These combine life insurance or an annuity with long-term care coverage. They are often easier to qualify for than traditional LTC insurance. Another advantage is that if long-term care is never needed, beneficiaries may still receive a death benefit.
• Short-term care plans: These policies usually cover a limited period, often up to about a year, Brooks says. Medical underwriting is generally less strict, and the coverage can help protect assets from the cost of a short but expensive care event.
• Paying out of pocket: This means covering care costs directly from personal savings and assets. It requires substantial resources and careful planning, but it also gives you the most control over the type and location of care.

Long-term care annuities are another possible alternative.

In the end, each person’s situation is unique, so speaking with a professional can be worthwhile.

Questions to answer first

Before comparing policies, there are several issues you should work through, says Harold Zazula, a certified financial planner with a certification in long-term care.

“Before tackling how to finance long-term care, it is necessary to know what kind of care you want, where, and from whom. Then build a funding plan around that, with LTC insurance as a possible component,” Zazula tells Money Talks News.

Zazula and other experts offer these tips for navigating LTC coverage:

• Be realistic about your health, your family medical history and how those factors may affect coverage.
• Review your retirement budget and decide how much you can add to monthly premiums.
• Compare multiple policies instead of settling on just one option.
• Read the fine print carefully before signing. Check daily benefit amounts, benefit duration and whether the policy includes inflation protection.
• Learn the differences among traditional policies, hybrid policies and chronic care riders.
• Understand how claims are paid, including the difference between reimbursement and indemnity.