Long-Term Care Insurance
Protect Your Assets & Maintain Your Independence
As you age, there's a good chance you'll need assistance with day-to-day activities. And that assistance can be expensive. Long-term care insurance can help pay for the care you'll need, while helping you:
- Protect your retirement assets
- Maintain your independence
- Avoid becoming a burden to your family
What is long-term care?
Long-term care is assistance people need when they no longer can care for themselves. This may be due to an accident, disability, prolonged illness or the simple process of aging.
Long-term care services include:
- Help at home with day-to-day activities, such as cooking, cleaning, bathing and dressing
- Care in the community, such as in an adult day care facility
- Supervised care provided in an assisted living facility
- Skilled care provided in a nursing home
What do long-term care services cost?
Long-term care services can be expensive, and costs vary widely based on where you live. Nationally:
- The average daily rate for a private room in a nursing home is $203, or $74,095 per year
- The average daily rate for a semi-private room in a nursing home is $176, or $64,240 per year
- The average hourly rate for a home health aid is $19
- The average hourly rate for a homemaker/companion is $17
Source: The MetLife Market Survey of Nursing Home & Home Care Costs, September 2005, MetLife Mature Market Institute
How will I pay for long-term care services?
You have a variety of options when it comes to paying for the long-term care
services you need. Here are some:
- You can pay for these services out of your own pocket and risk depleting a lifetime of savings
- You can apply for Medicaid, but you will be required to spend down your assets to meet federal and state requirements in order to be eligible
- You can purchase an individual long-term care insurance policy
How can long-term care insurance help?
Long-term care insurance provides benefits to help you pay for the long-term care services you need when you need them. An individual long-term care insurance policy is an important part of your financial portfolio. It can help you to:
- Protect your assets so you have the money to do all the things you planned to do in retirement
- Preserve your estate so you have something to pass on to your heirs
Long-term care insurance also can give you peace of mind knowing you can:
- Remain in your home
- Receive the quality care you need
- Avoid burdening your family with the responsibility of caring for you
Determine your need for Long-Term Care Insurance
The need for long-term care services can arise at any time. A serious illness or accident can strike people of any age. In fact, nearly half of all Americans will need long-term care services at some point in their lives. And one in five people over age 50 is at risk of needing it in the next 12 months.
Source: Long Term Care Policy Experts, Stakeholders Address Challenges Facing Aging Population as 77M US Boomers Near Retirement Age, April 20, 2005, U.S. Newswire
Do I need long-term care insurance?
If you're over age 65, the need for an individual long-term care insurance policy may be obvious. You know you may need help as you age, and you want to be able to pay for any long-term care expenses without draining your retirement savings or becoming a burden on your family.
But here's something that may surprise you: If you're 60, 55 or even 50 years old, you should consider adding long-term care insurance to your portfolio. The need for long-term care services can arise from a serious accident or illness. And if that happens, how will you pay for the care you need? Long-term care insurance can help. Plus, if you purchase a long-term care insurance policy at a younger age, the premiums you will pay will be lower than if you waited to purchase the coverage.
How much coverage do I need?
The answer depends on your situation. There's no single answer that's right for everyone. Instead, a policy can be tailored to provide the right amount of coverage to help protect you against the risk of depleting your assets if you need long-term care services.
Here are some factors you should consider when determining how much long-term care insurance is enough:
- The cost of care in your area
- The amount of Social Security, investments and other assets you have available to pay for long-term care services
- How much you can afford to pay out-of-pocket
Green Financial can help you understand the type of policy that would be best for your situation.