Long Term Care

The cost of nursing home care can be extremely high. Even individuals with substantial assets could deplete retirement savings and other assets. One solution is to buy a long-term care insurance policy that will pay benefits when you need nursing home or home health care.

Why you should think about long-term care insurance?

The statistics regarding long-term care speak for themselves.

Important Statistics

A retiree has a 43% chance (52% for females; 33% for males) of entering a nursing home.
Employer-sponsored long-term care plans are growing an average of 47% per year.
For every person living in a nursing home, there are four others receiving care at home.
Nursing home populations are 71% female.
Today, 50% of men who live to 65 can expect to live past 80, and 50% of women who reach 65 can expect to live beyond age 84.
The average length of a nursing home stay is two and a half years.
The average cost of a nursing home is about $55,000 a year. With the average stay being two and a half years, the cost totals more than $139,500.
27% of "baby boomers" think they are covered by long term care insurance, but only 6% of the elderly actually have this insurance.
A modest assisted-living unit for one person can run about $27,000 a year.
By 2020, total long-term care expenses are projected to be nearly $260 billion annually.
In 20 years, an average nursing home stay will cost $265,000.
Medicaid: Before it begins to cover the cost of care, elderly people must deplete enough assets to qualify for aid.
Medicare only covers six percent of long-term care costs nationally.
The risk of a home being destroyed by a fire is 1 in 1,200.
The risk of a major loss from an automobile accident is 1 in 240
The risk of incurring a major long-term care expense is 1 in 5.

Because the cost of nursing home or at home care is very expensive, it puts the lifetime savings and assets of most retirees at risk. A single month at a nursing home in most areas costs between $3,000 and $4,500, translating into almost $50,000 per year. These costs may be less in some areas, but can be significantly higher in others. Unfortunately, Medicare, Medigap, and private health insurance do not cover the costs of long-term care. These types of insurances pay only for hospital stays and brief periods of post-hospital recovery.

The answer may be long-term care insurance (LTCI). It can prevent you from using up all your hard-earned retirement assets on long-term care.

The longer you wait to purchase LTCI, the greater the risk becomes that you'll need long-term care, and the more expensive a policy becomes.

Our long term care specialists can help you assess your long term care needs as well as evaluate which program, if any, would work best for your particular situation.

Should you purchase LTCI?

If you have significant savings and substantial resources, you should consider purchasing LTCI. Of course, if you have very substantial savings (over $500,000), you may want to take the chance that you can simply pay for long-term care out-of-pocket, should you ever need it. But otherwise, by purchasing LTCI, you avoid the risk that all your savings and assets will be used up to pay for long-term care, leaving little to pass on to your spouse, children, or other loved ones.

On the other hand, if you have only a small amount of savings and assets (less than $50,000), you may want to forgo LTCI due to the high cost of premiums. If it turns out you need long-term care after all, you can spend down your assets rather quickly and then qualify for Medicaid.

Click here for a 1 Financial Marketplace Associate insurance expert to assist you with your insurance needs.