As we age, there are increasing chances that we may need long-term care. More than half of Americans turning 65 today will need some type of long-term care. Having to deal with long-term care becomes increasingly likely as we age. In the United States, it is estimated that more than half of seniors turning 65 today will require some form of long-term care during their lifetimes. As long-term care is not generally covered by private health insurance or Medicare, it is important to prepare for this eventuality.
Every adult over 50 should consider long-term care insurance for themselves and their spouses. It’s important to prepare for any potential future events by creating a plan which addresses the financial and emotional repercussions of needing this type of care.
Insurance can be an effective way to cover necessary services, but it is probably best coupled with time-saving solutions like home aides or other non-medical in-home caregiver options so that your loved ones can remain in their homes and communities rather than moving to an assisted living facility.
What is long-term care?
Long-term care refers to a range of services that assist those who are unable to perform their daily tasks on their own. Dressing, eating, and bathing is among the daily activities known as activities of daily living (ADLs).
There can be a need for long-term care due to chronic illness or physical impairment, but the most common reason is a cognitive issue, such as Alzheimer’s disease. A person’s care can be provided at home, in a community setting, or in a nursing home.
Approximately how much does long-term care cost?
Individuals over the age of 50 should consider long-term care insurance if they are likely to need prolonged medical care. The average cost for home health care is $23.27 an hour and a private room in a nursing home averages $103,660 per year. The national average for long-term care is approximately 2.5 years for women and 1.5 years for men.
Costs associated with long-term care can quickly add up and negatively affect your retirement and the assets that you’ve worked so hard to accumulate. In order to protect your finances and ensure you have access to the type of care you prefer, you need to be aware of the different long-term care planning options available to you.
Planning for long-term care
There are several ways to address long-term care, depending on your age, health, means and needs.
Options for long-term care planning:
- In general, standalone or traditional long-term care insurance plans provide comprehensive coverage based on the premiums paid. They can be customized to meet your needs, and they offer the possibility of receiving care at home, in an assisted living facility, or in a nursing home.
- Long-term care insurance and life insurance are linked in linked-benefit or hybrid plans, which provide a wider range of benefits and greater flexibility. However, since multiple risks are being insured, the price point is usually higher.
- Chronic care riders on life insurance policies offer the simplest coverage, allowing you to access a portion of the death benefit in the event of chronic illness.
- If you have substantial assets, you may be able to pay for long-term care out-of-pocket (self-fund).
- Medicare does not cover long-term care (unlike Medicaid, which does cover some long-term care), but you have to spend down most of your assets to qualify and you have to get care in an approved facility.
When to begin planning for long-term care
In your 40s and 50s is the best time to explore private long-term care solutions since health and age are key factors.
Don’t wait too long to start planning for long-term care. Even if you choose to just cover part of your risk with a small amount of coverage, knowing that you’re protecting your family and retirement can be an important benefit of having a plan. Give us a call at 800-208-4974 we would be happy to answer your questions about Long Term Care.