Dear Dave,

My dad passed away about a year ago, but he left my mom in really good shape financially. They never had any consumer debt, the house is paid for, and they had about $1 million in assets. Dad also left her a $500,000 trust. Mom is going to be 60 next year. She is in good health, but considering her age and financial situation, do you think she needs long-term care insurance?

Darby

Dear Darby,

I’m so sorry to hear about your dad. Losing a spouse, or a father, is tough at any age. The good news is your dad did a great job of planning to take care of your mom. He left her in fine shape money-wise, but yes, she needs long term care insurance and a good estate planner. You need to help your mom do everything possible to handle her situation wisely.

I usually suggest folks wait until age 60 to buy long-term care insurance, because the likelihood of filing a claim before then is very slim. In fact, about 95% of long-term care claims are filed for people over 70. That’s why, in most cases, it doesn’t make sense to get long-term care insurance earlier than age 60.

Insurance isn’t a one-size-fits-all kind of thing, though. If someone has a family history of illness or other health issues at a younger age, they may need to get long-term care insurance earlier. But you shouldn’t buy long-term care coverage at a young age just because you’re paranoid of what might happen, or because you think you’ll save money. That’s just not true.

In the event your mom becomes unable to take care of herself at some point, long-term care insurance would be an absolute necessity. The cost of nursing home care these days is astronomical. Again, your mom is in a great place financially, but a prolonged stay in a nursing home somewhere down the road could eat up her nest egg in a hurry.

Long-term care insurance is a wise part of any good asset management plan.

Dave