Why I Bought Long-Term Care Insurance in My 20s

Insurance Jackie Lam
Two 20-something women laugh inside of a well-lit cafe: long-term care insurance

When you're in your 20s and thinking about money matters, your biggest concerns are probably staying on top of your bills, paying off debt and saving up for something fun — like a tropical getaway to Bora Bora. The focus is often the here and now. While I was certainly concerned about all of the above, I also decided to purchase long-term care insurance in my late 20s.

Long-term care insurance can help cover out-of-pocket costs associated with assisted living, nursing-home care or other forms of elderly care. This insurance type can also help with expenses related to certain diseases, chronic disorders and debilitating injuries, including Alzheimer's disease, a stroke or diabetes. Of course, coverage for these diseases varies between long-term care insurance plans.

Most people who purchase long-term care insurance policies are in their late 50s, according to the National Association of Insurance Commissioners. While I was far from the norm, I'm glad I made this decision.

The Benefits of Youth

In the U.S., the current life expectancy is 76.1 years for men and 81.1 years for women, according to the Centers for Disease Control and Prevention. Life expectancy is only projected to increase in the future. So, if I do need long-term care someday, I may need it for a more extended period of time.

I learned about long-term care insurance during a presentation at my last job, and — after talking to a financial representative on the phone to get a quote — I was sold. I was only in my late 20s, so my monthly premium was far less than if I had waited to purchase a policy later in life. The amount I pay each month will never change, and I didn't have to go through a lengthy application process.

So, what's the cost of my long-term care insurance policy? My monthly premium is about $30 per month, but premium costs vary. I did the math and figured that if I keep my coverage for 30 years, it would cost me about $10,800. If I keep my coverage for 40 years, it would be a grand total of about $14,400.

Now, that's certainly not a small chunk of change. But according to the Department of Health and Human Services, the average cost of a home health aide in the U.S. is a little over $20 per hour. If you're looking for a private room in a nursing home, the average cost is just under $8,000 per month — or $96,000 a year.

Unfortunately, these costs are expected to increase in the future. But if I ever need long-term care, the insurance would pay for itself in a short period of time.

Caring for My Loved Ones

While I'm single now, if I eventually get married and start a family, I wouldn't want to burden my loved ones with the costs of long-term care. And I would want my loved ones (or a charity of my choice) to receive any money I have in savings or investments someday.

My mother is a nurse who works in convalescent care. So, I witnessed what it's like to be bedridden for long periods of time firsthand. It made me realize at an early age how imminent aging and illness can be. It also made me understand what I would like my standard of living to be if I fall ill and need help with everyday tasks in the future.

Yes, my friends think I'm a little unusual for buying a long-term care insurance policy at such a young age, but that's OK. I know the money I spend on this insurance policy could easily go toward things that improve my quality of life today. While it's quite tempting to spend that money on a subscription box service or a dinner out with friends, I'm looking out for my future self and my loved ones.

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