Ask an Advisor: Our Long Term Care Premiums Are $500 Monthly and We've Paid $72k. Should We Keep or Cancel the Policy?

Core Insights - The article discusses the dilemma faced by a retired couple regarding the rising premiums of their long-term care insurance and whether to continue paying or cancel the policies [1][3]. Group 1: Sunk Costs - The $72,000 already paid in premiums is considered a sunk cost and should not influence the decision on whether to continue the policy [3]. Group 2: Value of Insurance Going Forward - The critical question is whether the couple still needs long-term care insurance and if the current premium of over $500 per month is justified based on their age and financial situation [4][6]. Group 3: Age Considerations - Statistics indicate that the likelihood of needing long-term care increases with age, with 8% of individuals aged 65-74, 17% aged 75-84, and 42% aged 85 and older likely to require such care [5][8]. Group 4: Financial Resources and Goals - The couple's decision may depend on their financial resources; if their investments have performed well, self-insuring could be a viable option. If not, continuing to pay the premiums may be advisable if they can afford it [7].