It’s not uncommon to hear people say, “I need a new car…a new house…a new job.” And you might also hear people talk about how important it is to “plan for the future.”
But how often do you hear, “I need long term care planning?”
For most people, Long Term Care Insurance doesn’t even appear on the radar screen.
But it should.
And here’s why:
1. The need for long-term care services can arise at any age
We tend to associate long-term care with older people.
But a prolonged illness or injury can leave people at any age unable to care for themselves at any age.
And when you consider that medical advances are saving the lives of people with catastrophic conditions, like head injuries, heart attacks and strokes, it’s easy to see that some people may need care for years.
2. The cost of long-term care services is high
Based on national averages, a year in a nursing home can cost more than $76,000.
And while most people dismiss the idea of going to a nursing home, there’s still a cost associated with care provided at home.
Homemaker services – help with cooking, cleaning, grocery shopping, etc. – cost approximately $19 per hour. That’s more than $36,000 per year based on services received eight hours a day, 20 days per month.
And care provided by a home health aide – someone who administers medications, monitors health conditions, etc. – is even more costly.
3. Most people simply can’t afford to pay for long-term care services
While many people think they’ve saved enough for a comfortable retirement, they probably haven’t considered how they’ll pay for long-term care services.
Paying for care out of pocket has the potential to deplete a lifetime of savings.
In fact, many people who fail to plan are faced with liquidating assets – selling a home, cashing in stocks or mutual funds, dipping into 401(k) accounts and forgoing plans to leave an inheritance for their kids.
4. Some people mistakenly believe their long-term care costs are covered
Unfortunately, they don’t understand that health insurance doesn’t cover long-term care services.
And Medicare provides a limited amount of skilled care – just enough to help people get back on their feet after an illness or injury.
In addition, Medicare doesn’t cover custodial care (help with the activities of daily living, such as bathing and dressing), which is the type of care most people need. Medicaid, on the other hand, does cover long-term care services, typically in a nursing home, but only for people with limited resources.
In order to qualify for long-term care benefits under Medicaid, many people would have to “spend down” their assets – not a good option for people who want to leave an inheritance for their kids.
5. Most people don’t want to become a burden to their families
Sure, family members will step in to help when a loved one needs care.
But they may not be able to provide all the care that’s needed.
A spouse may not have the physical strength to be the primary caregiver. And kids have their own family and career responsibilities. Assuming the role of full-time caregiver may mean quitting a job, reducing work hours or passing up a promotion, not to mention the strain it puts on otherwise loving relationships.
Questions to ask?
People need to understand the importance of planning for long-term care.
Start by asking yourself a few simple questions
- What’s your plan?
- How will you pay?
- Which asset will you use?
- Who will take care of you?
- Which child will you live with?
Simply picturing yourself needing long-term care services and thinking about what you would do in that situation is an important first step. Then, you can consider the right solution – for many a Long Term Care Insurance policy that can help protect retirement savings, prolong independence and preserve family relationships is a wise choice.
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Then you can make an informed decision that’s right for you… and your family.
