3 Things 10-27-25

 Thing One

A Reminder About Long Term Care Insurance

Long-term care insurance (LTCI) is a critical financial tool designed to cover the costs of extended care services, such as nursing homes, assisted living, or in-home health aides, which can easily exceed $100,000 annually in many regions. As people live longer, the likelihood of needing such care increases—nearly 70% of individuals turning 65 today will require some form of long-term support. With rising healthcare costs and limited coverage from Medicare, which primarily handles short-term skilled care, LTCI helps protect assets and reduce the burden on family members. However, deciding when to purchase it and how to fund it requires careful consideration to balance affordability and coverage needs.

The optimal time to buy long-term care insurance is typically in your mid-50s to early 60s, when premiums are more affordable and health qualifications are easier to meet. At this stage, individuals are often still in good health, reducing the risk of denial due to pre-existing conditions, which becomes more common after age 65—where approval rates drop significantly. Premiums rise about 6-8% annually as you age, so locking in rates earlier can save thousands over time; for instance, a policy bought at 55 might cost far less than one purchased at 70. Waiting too long not only increases costs but also limits options, as some insurers cap eligibility around age 75-80.

When it comes to paying for long-term care insurance, several options exist beyond simply out-of-pocket premiums, allowing flexibility based on your financial situation. Traditional standalone LTCI policies involve regular premium payments to an insurer, covering specific care expenses when needed. Hybrid policies combine life insurance or annuities with LTC benefits, where unused funds can go to beneficiaries upon death, often providing a lump-sum or monthly payout for care—potentially doubling or tripling the initial investment for LTC purposes. Self-funding through savings, investments, IRAs, or 401(k)s is another route for those with substantial assets, essentially "self-insuring" without premiums. Government programs like Medicaid offer last-resort assistance for low-income individuals, though they require spending down assets first, while some life insurance policies allow accelerated benefits for LTC.

A common fear among potential buyers is the possibility of premium increases, which have plagued older policies due to insurers underestimating longevity and care costs, leading to hikes as high as double in some cases. In 2025, inflation and rising demand continue to pressure rates, making this a valid concern for policyholders. However, not all policies are equally vulnerable; newer ones are priced more accurately based on updated data, reducing the likelihood of drastic jumps. Regulatory oversight in many states now limits increases, requiring approval and often providing options like reduced benefits to offset costs.

To mitigate premium increase risks, consider hybrid policies, which typically feature fixed premiums or built-in protections against hikes. If facing a rise, evaluate alternatives like paying the increase if affordable, scaling back coverage (e.g., shorter benefit periods), or converting to paid-up status with limited benefits based on premiums already paid. Shopping from reputable insurers with strong financial ratings and consulting a financial advisor can help select stable options, while building a diversified funding strategy—including savings buffers—provides additional security.

Ultimately, securing long-term care insurance in your 50s or early 60s, funded through a mix of premiums, hybrids, or self-insurance, can offer peace of mind amid uncertainties like premium fluctuations. By addressing these elements proactively, you safeguard your future without derailing retirement plans.

If you need help with this, we're here for you.

Thing Two  

Have You Considered Pay-Per-Mile Insurance?

 I recently had a chat with my friend "Tom", a 68-year-old retiree who’s been on a pay-per-mile auto insurance policy for two years. He was frustrated, thinking of switching back to a traditional fixed-premium plan because a few longer road trips had spiked his bills. As we talked through his driving habits and ran the numbers using his actual rates—a base of $112 per month plus 15.4 cents per mile—I saw how his situation reflects many older drivers who drive less in retirement.  

Tom’s driving patterns show why pay-per-mile insurance is often a smart choice for older adults. In a typical month, he drives about 200 miles: a few 10-mile round-trips to the grocery store each week, a weekly 30-mile visit to his grandkids, and occasional 15-mile trips to

doctor’s appointments. With his policy, that’s $112 base plus (200 miles x 0.154) $30.80 in per-mile fees, totaling around $142.80. Compare that to a traditional policy averaging $200 a month, regardless of mileage. In quieter months, like when winter keeps him home and he drives only 100 miles, his bill drops to $112 + $15.40 = $127.40—a savings of over $70 compared to the $200 flat rate. Tom’s concern stemmed from occasional high bills, but the overall savings were clear. 

We dug into those busier months that had Tom second-guessing, like last summer when he drove 500 miles, including a 300-mile round-trip to a family reunion at the lake. His bill hit $112 + (500 x 0.154) $77 = $189, which is less than the $200 traditional plan. More importantly, these high-mileage months are rare for him—maybe once or twice a year. If Tom averages 250 miles monthly (3,000 miles annually), his yearly cost is about $1,833.60, compared to $2,400 with a traditional policy. That’s over $560 saved, enough for a vacation or home upgrades. For older drivers like Tom, who drive less overall, these savings make pay-per-mile a compelling option.

The flexibility of pay-per-mile insurance is a huge plus for older drivers, as I pointed out to Tom. Retirement driving can vary—some weeks involve no trips, while others include a spontaneous outing. Unlike traditional plans with a fixed $200 premium, pay-per-mile adjusts to actual usage, tracked via a simple plug-in device or app. Tom’s setup sends him clear mileage updates, which he finds straightforward. Plus, the policy encourages efficiency; knowing each mile costs 15.4 cents, Tom combines errands, saving on gas too. For older drivers, this adaptability means they’re not overpaying during low-driving periods, which fits their often unpredictable schedules.

Tom did raise some valid concerns. If an older driver ramps up mileage—say, a part-time job adding 400 miles monthly—the cost could hit $112 + (400 x 0.154) $61.60 = $173.60, still under $200 but closer to traditional rates. Tech concerns, like using tracking devices, might also worry less tech-savvy seniors, though Tom, who's in his 80's didn't seem to have a problem with the minimal requirements he currently has as far as interfacing with technology. After our talk, he decided to stick with pay-per-mile, reassured that the savings outweigh the occasional spikes.

If you're driving less and still paying the same - or even more since car insurance rates are generally up and tend to rise a bit more for mid and late-stage retirees - you might want to seriously consider a pay per mile policy for all or some of your vehicles.

Once again, we can help.