The Wall Street Journal has engaged a number of personal finance experts to debate several topics of importance to the rest of us. One of these recent debates was over the question of whether we should purchase long term care insurance. The expert in favor of purchasing LTC insurance is a professor of health economics and policy at George Mason University. His argument is that “hoping for the best” is not a wise or effective financial strategy.
The expert that disfavors LTC insurance is a staff attorney at California Advocates for Nursing Home Reform. His argument is that instead of buying the insurance with a $3500 annual premium, invest the premium amount., giving you $70,000 plus interest in 20 years. There is a huge psychological flaw in that argument. The average consumer will not have the discipline to actually invest the premiums that are not paid. They are much more likely to spend it. Also, for older boomers, there is no reasonable assurance of 20 years without a long term care need.
Here is the link to full debate article which is definitely worth reading.