Is long-term care insurance in your future?

By: | Tags: | Comments: 0 | January 4th, 2017

Today, only 8% of the 70 million “baby-boomers” (those born between 1946 and 1964) have long-term care insurance. The reality is, by 2026, a large percentage will be facing their new reality; the need for some form of supportive assistance. Whether the need is physical care, social interaction, transportation or housing, the services required are indeed,long-term care.

The cost of long-term care 

In a 2016 “cost of care” survey reported by Genworth Financial, the monthly costs of caregiving services are sobering. Employing a home health caregiver will average just over $3800.00, while a room in an assisted living facility is slightly less, about $3600.00.  Long-term care (LTC) is not a medical expense, and is not covered by health insurance, or Medicare. Those who have exhausted all available resources may meet eligibility requirements for Medicaid, which does provide for some LTC benefits. 

The bottom line is, long-term care is expensive.  A room in a nursing home will cost, on average, $92,000 a year. While these fees are do-able for some, they are cost-prohibitive for many. Unless funding the all encompassing needs and expenses of aging is definitely not a  problem, consider investigating the feasibility of LTC insurance.

Review of LTC insurance:

Not all LTC policies are created equal. Coverage, benefit limits, and costs will vary by company, and customer service and financial ratings are of great importance.  Illinois has over 20 companies licensed to sell long-term care policies. Consumers Advocate  lists the top 5 long-term care insurance  sites for securing information about long-term care policies. 

Utilize all the resources at your disposal. The American Association for Long-Term Care Insurance  and AARP, are both excellent sources of credible information. 

Become a savvy consumer, compare multiple policies based upon exclusions and limitations, as well a costs. Factor in your income now, expected income following retirement, savings, Social Security, and investments to determine if you will have sufficient funds to cover living expenses as well as any needed outside care.

 Benefits of coverage:

Long-term care will become a reality to many; LTC insurance is a commodity that is no longer just for the very wealthy or the indigent. In addition to stand alone policies, many carriers now offer a long-term care rider to existing whole life policies. This allows using a percentage of death benefits for long-term care needs. Qualifications for collecting benefits are based on physical and cognitive needs.

Americans are living longer, and statistically many will require assistance apart from what family members are physically or financially able to provide. A financial planner is an excellent source of advice on ways to incorporate the cost of a LTC policy into the family budget. There is an increasing awareness of the ease in which caring for seniors can devastate a lifetime of savings. Although costly, long- term care insurance, in some form, will offer protection against the rising costs of supportive services, especially residential nursing homes. 

Optimal coverage,ideally, will afford a continuum of high-quality medical and community services aimed at maximizing independence in the least possible restrictive location. When investigating various policies, look for ones that cover home care, assisted living, adult day care, Alzheimer’s care, and respite care, as well as skilled nursing home stays. Some carriers might place restrictions on certain facilities or programs, so choose carefully.

Sooner than later is the time to begin thinking about long-term care insurance. Planning is the key to getting the coverage you need at a price you can afford,both now, and in the future. Consider all of the possibilities and options available, then make an informed decision based on your individual needs and budgetary constraints.












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