Blog Post: Why You Should Have Long-Term Care Insurance

I have been advocating for years on the need to purchase long-term care insurance. Statistics bear out that 50 percent of the aging population will require some long term health care. Anyone with even a passing experience with Alzheimer's, stroke, Parkinson's or elder frailty can appreciate the severity and financial devastation of these all-too-common life events and the inevitable care required.

According to the Long-Term Care Insurance National Advisory Center, by 2030, one in five Americans will be a senior citizen. If you are a Baby Boomer, this includes you. Americans are living longer and healthier, thanks to better diet, better medical care and safer living & working environments. Yet no one is immune to the effects of aging and longevity - effects that often result in reduced physical or mental ability. 

In 1994, 7.3 million Americans needed long term care (LTC) services at an average cost of nearly $43,800 per year. By 2000, this number rose to 9 million Americans at nearly $55,750 per year. It's currently near $75,000 per year. By 2030 those needing LTC will skyrocket to 23+ million Americans, with projected, individual long term care costs reaching $300,000 annually per individual! 

Will you have that kind of money to spare?

And now comes word that an increasing number of insurers are discontinuing selling such policies. The Wall Street Journal reported that Prudential Financial announced plans to stop taking applications for individuals policies that pay for nursing homes, assisted living, and in-home care. Prudential is the 10th of the top 20 insurers (by sales) to quit this market in recent years.

People used to shop for long-term care coverage when they were well into their 60s. That may be too late for some clients now. In light of this trend, I believe it has become more important than ever to buy a policy now rather than take too long to shop and put off the decision until later. Procrastination will end up costing much more.

You may also consider buying one policy with a “shared-care rider” so that benefits can be used by either spouse or split between them, or even a “hybrid”, combining long term care and life insurance.

I urge you not to delay and to contact your long term care insurance broker as soon as possible to discuss options and costs.

Steve Greenwood, Esq.