Why Long Term Care?
Around 70% of all Americans age 65 and older will need long-term care at some point in their lives
Many people equate long term care with nursing homes, but in reality long term care encompasses a wide range of services and support you may need to get through basic and personal tasks of everyday life as you get older.
Which is why considering your options for long term care, as well as putting a plan in place now, can help prevent potential long-term care expenses from impacting your family and finances in the future.
It's Important to Know Your Options
It is estimated that by the year 2034, one year of home health care will cost over $70,000
The first step in creating the perfect long term care plan for you is to clear any misconceptions regarding how your long term care expenses will be covered, and knowing what your funding options really are.
Health insurance, Social Security, Medicare, Medicaid, adult children, and out-of-pocket may all be options you consider can help cover long term care expenses as you age. However, there are some misunderstandings regarding how guaranteed these options are to cover your long-term expenses.
Health Insurance
Health insurance does not cover long-term care expenses.
Medicare
Medicare may cover a portion or your long-term care costs, but not indefinitely (only up to 100 days). Requires qualifiers such as a three-consecutive-day stay in a hospital under treatment, among others.
Medicaid
Only covers long-term care expenses for individuals with assets under $2,000 or less (usually varies by state), and care may be limited to a nursing home.
Adult Children
Even though many people assume their adult children will care for them later in life, this assumption and option presents a vast physical and emotional burden, and many people are unable to take it on.
Out-Of-Pocket
Using your income, savings, or selling your assets may be an option for you to cover your long-term care expenses. However, considering the median annual cost of a private room in a nursing home ($87,600 in 2014), it may not be the most efficient option.
Long Term Care Coverage
Long term care coverage is an efficacious way to protect yourself and your assets from the potentially negative impact of a long term care expense.
Select the Product that Fits Your Needs
It is important that you select the long term care product that fits your needs. If you and your insurance agent have come to the agreement that long term care is right for you, you should know there are three common types of products to choose from.
Life Insurance Policies with a LTC Rider
If your biggest concern is leaving a legacy or caring for your loved ones, this option is for you.
Linked Benefit Policies
If you're primary concerned with long term care coverage and have less need for life insurance, this policy might be a good option for you.
Stand Alone Policies
If you do not need life insurance and want long term care coverage with lower premiums, then a stand alone policy could be right for you.