Long-term care is something that people don’t want to think about (understandably), but this often means they realize they want or need it when it’s too late to get it.
At 1706 Advisors, we see the value of long-term care insurance (LTCI) every day with our clients. We also had a profound experience with LTCI in our own family when our father/grandfather, Stan Lang, was no longer able to care for himself.
For many people, LTCI is an important part of their financial security plan. It can help preserve assets and protect loved ones from having to bear the financial burden of your long-term care needs.
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What is the definition of long-term care?
Long term care is defined as support for the activities of daily living – bathing, dressing, eating, toileting, continence, and transferring (mobility). People can need long term care for cognitive or physical reasons. Medical insurance does not cover long term care needs, and Medicare coverage is limited, which is why long-term care insurance is an important consideration.
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How does it work?
Long term care can take place at home, at a part-time adult care facility, or at an assisted living or nursing home facility. The average cost of a private nursing home room in the U.S. is over $9,000 per month, which can quickly drain a family’s resources. Long term care insurance provides financial support to cover these costs.
Do I really need it?
After someone turns 65, they have almost a 70% chance of needing some type of long-term care in their remaining years (source: longtermcare.gov). Without long term care insurance, a family’s options in caring for a loved one are much more limited. LTCI helps a family to make decisions based on what’s best for their family, rather than making a decision based on cost alone.
When is the best time to get it?
People can consider getting LTCI as early as 40, but people typically buy it between ages 50 and 65. As a rule of thumb, the earlier you purchase it, the lower your premiums may be, resulting in savings over time. It’s best to speak with someone about your full financial picture before making a decision, so LTCI is part of an integrated strategy.
On a personal note, LTCI gave us so much relief during a difficult time. It relieved our family from the financial burden of covering the cost of care, and relieved us from the emotional roller coaster of being full-time caregivers. It also gave us the gift of time – time we could spend with our beloved Stan, sharing family togetherness in his last year, knowing his needs were covered.
LTCI may not be the right answer for every family, but it’s definitely something that all families should at least consider as part of their overall financial plan.
To talk about your own personal situation and whether or not LTCI is right for you, reach out at any time.
