New Year’s Resolution: Check Out Long-Term Care Insurance

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New Year’s Resolution: Check Out Long-Term Care Insurance  

With 2018 here, you may find yourself searching for the perfect New Year’s resolution. Will you finally get back in the gym? Kick a bad habit? Or how about spend more time with family?

While these are all sound options, there is one resolution we recommend above all the rest: setting yourself up for long term financial wellbeing.

Regular health insurance along with Medicare have limited benefits if you need long-term care (LTC). The Federal government defines long-term care as care given in nursing homes, home health care, and assisted living facilities. But, many people needing long-term care opt to have their long-term care given to them at home. No matter where care is given, costs are expensive. Care at home is the least expensive with care at a skilled nursing facility being the costliest.

Long-Term Care Costs

The cost of long-term care has a range that starts at around $44,000 up to $97,000. The costs are dependent on the amount of care needed. If we assume a three-year stay at a nursing home, it is likely a stay will exceed a quarter of a million dollars according to the Genworth 2017 Cost of Care Survey. For people interested in leaving cash and investments to loved ones when they pass, this is a huge crimp in most folk’s estate. Estimates are that at least 70% of people over the age of 65 will need some type of long-term care during their lifetime.

  • Nursing Home, Private Room: $97,452 per year
  • Nursing Home, Semi-Private Room: $85,776 per year
  • Assisted Living: $45,000 per year
  • Home Health Aides: $15 to $28 per hour
  • Adult Day Health Care: $68 per day

 

Paying for Long-Term Care

Did you know that Medicaid is the number one payor for long-term care? This state-federal partnership covers long-term care costs once recipients deplete their resources. This means that even the very wealthy must “spend down” their legacy before Medicaid begins to pay. Many an estate has been stripped because of long-term care.

To avoid financial difficulties, consumers that plan, lock in their long-term care insurance policy rate early. Starting a long-term care policy at around age 50 is when most insurance advisors suggest you begin buying a long-term care policy. Following are the reasons why.

  1. Your health is generally better than later in life and you have assets needing protection that include your home.
  2. Premiums are lower when you purchase starting in your 50s. The premiums are 67% lower at age 50 than if you start your coverage at age 70.
  3. Protection against inflation when you buy an LTC policy with a 3% compound inflation rider will keep the buying power of your benefit constant regardless of time of claim.

 

Ready to Take Next Steps?

Put Research Long-Term Care at the top of your New Year’s resolutions list and keep your financial future bright. For more information, contact Schneider & Shulman Associates for a free consultation.