IMOR Financial - Long-Term Care Insurance

The IMOR Financial Blog

Long-Term Care Insurance
16
Mar
2021

Long-Term Care Insurance

Even if you’ve been planning your retirement for many years, one major expense can ruin your financial plan. Today, 65-year-olds have about a 70% chance of needing some type of long-term care services in their future.

The definition of long-term care is coverage that will pay for assisted living, nursing home health care, and personal or adult care for individuals under 65 or older with a chronic illness or disability condition that needs constant supervision. The average cost of a private room in a nursing home is more than a $100,000 per year, according to the Genworth Cost of Care Study. One year in an assisted living facility averages $48,000, and the average cost of a home health aide working a 44-hour work week adds up to more than $50,000 over the year.

People are skeptical about how long-term care works, and many will make comments like, “Who even needs it?" or say, “I have no use for long term care," or even, “This will never happen to me." You never know what is coming as you get older as far as your health care needs go. You may have to make these difficult choices of nursing home or home care. You may be able to take care of your spouse at night, but if you are still working outside the home during day, you'll need a caregiver for while you are away at work. With the right policy in place, those financial burdens are lifted.

Few people are prepared to handle a financial burden when something happens. They have a false sense of security.

Fact From Fiction: Many people assume these costs are covered by a government program. Medicare covers very few long-term care expenses and Medicaid only kicks in if you’ve spent almost all of your assets - this includes savings and retirement.

Here’s the catch, only 18% of people say they own it. This need gap is up 8% from a year ago and suggests an active market demand from 110 million consumers.

Why long-term care?
Probability, cost, children may bare the burden, affordability, quality and value. You could go bankrupt if you needed it and did not have a current policy, but if you had a policy in place, you would have time to breathe when you needed to and the security of knowing that your assets are protected. Plus, you could continue maintaining them, and your estate is protected. If you have helped an elderly relative or parent find care or know of a friend or other family member who has, you know how quickly these costs can deplete a lifetime of savings.

The time to buy long-term care insurance tends to be in your 50’s or early 60’s. If you wait till you’re older, you’ll pay higher premiums and be more likely to have a medical condition that would make it difficult to pay for a policy. No matter which route you may choose, it is important to consider how you would pay for the possibility of long-term expenses when planning for your financial future.


If you would like more information on how a long-term care insurance would benefit your family, reach out to Vickie at 717-790-2171.

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