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A popular bit of advice is to purchase long-term care insurance in your 40s or 50s because you can get it when it is most affordable — and before you find yourself with health conditions that could leave you uninsurable. But what happens when you are diagnosed with an unexpected illness or become chronically ill at an early age — before you've had a chance to buy long-term care insurance?
That's what happened to Mark Charnet, 59, founder of American Prosperity Group in Pompton Plains, New Jersey. “I was diagnosed as diabetic when I was 30,” he says. He also has experienced a quintuple bypass and suffered multiple strokes. “I knew that I would never be able to [qualify for] long-term care insurance,” he says.
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The costs of paying for long-term health needs can be enough to break anyone's budget. In fact, the median cost of staying in a semiprivate room at a skilled nursing facility is $93,075 a year, according to insurance provider Genworth Financial. Having a home health aide assist with activities of daily living (ADLs) such as bathing, dressing or eating has a median price tag of $54,912 per year.
Assessing the risk
As with all insurers, long-term care insurance providers evaluate risk when issuing a policy. If you have a high risk of needing long-term care services, you are less likely to qualify.
But having a health challenge in your past isn't an automatic disqualifier — particularly if you have recovered from it, says Chris Orestis, president of Retirement Genius, a company that provides financial advice to seniors. “They're going to look at your past but they're really going to factor in your current health and your current condition,” Orestis says.