Cost of long-term-care insurance going up, but it's still a wise investment, depending on your income

Judy Witte says her long-term-care insurance premiums
are going up at a worrying rate. C-J photo by Matt Stone.

Seniors are facing increases in their premiums for long-term-care insurance as insurance companies scramble to deal with increasing longevity of seniors and low interest rates that are "crimping investment returns," Chris Otts reports for The Courier-Journal.

Louisville retiree Judy Witte, 72, said she received a letter from her insurance company recently saying her premiums will go up by 77 percent, from $986 to $1,746 per year.

Her situation is part of a larger trend in which the cost of an average policy has increased by 6 to 17 percent from 2011 to 2012. Long-term-care insurance helps pay for the cost of assisted living, nursing homes, hospice care and home care.

In the Louisville area, assisted living costs about $45,000 per year and nursing homes cost about $72,000 per year and more.

People should buy long-term-care insurance if they can't afford the care they might need without dipping into their savings, Otts reports. "For example, someone who receives $100,000 a year in retirement income but spends only $30,000 might be able to afford an assisted-living center or nursing home," Otts notes. But if that same person spends $80,000 a year, then it would be a wise investment to buy long-term-care insurance because they would not be able to afford the assisted living or nursing home costs.

The right time to buy long-term-care insurance is between age 50 and 60. If Witte had waited to buy hers today, it would have cost her more than $26,000 a year, Otts reports. "To me, it's a precious possession," she said. "It helps me sleep at night to know I have this." (Read more)