Are You Ready for the Cost of
Long-Term Care?
You’re
young…
You’re
healthy…
You’re
self-supporting…
The idea of
actually needing long-term care couldn’t be further from your mind.
But what if
that changed overnight?
An accident…
A sudden
illness…
An
unexpected diagnosis…
Any number
of things can take away your health and your independence.
Chances are
very good that your regular health care coverage won’t cover the expense of
long-term care.
And add to
that the fact that statistically if you live beyond the age of 65, you are
likely to spend an average of 2.5 years in a nursing home.
Don’t wait
until you’re older to plan for any of these possibilities.
Now is the
time to plan and this is what you need to know:
What
Exactly Is Long-Term Care?
Long-term
care is a number of broad range supportive medical, personal and social care
you need to take care of basic living for an extended period of time. The care can be given in your home or
in a specialized nursing facility.
What Can
You Expect to Pay?
Long-term
care averages about $200/day. If
you spend one year in a nursing home, that works out to about $73,000 a
year. Now imagine what it will
cost for that average 2.5 years you can expect to spend in a nursing home.
And
contrary to popular belief, Medicare does not cover those expenses. Medicare will pay for 100 days of care
to recover from a specific illness or injury, if you meet the very stringent qualification requirements. That’s it.
One of the
best things you can do to plan ahead is to purchase long-term care insurance.
What To
Look For In Long –Term Care Insurance
1.
Make
sure you pick a carrier that will be around awhile. You probably won’t need to use your policy for a number of years, but you want the carrier you’ve chosen to still be around
when you do need them.
2.
Pick
the right elimination period. The
elimination period is the time between when you start receiving care and when
your benefits kick in. Usually the
longer your elimination period, the lower your annual premium. Since Medicare pays at least part of
the first 100 days (if you qualify), you might want to consider having your benefits start after
that first 100 days has expired.
3.
Consider
your current age. Most people buy
long-term care insurance in their 50’s while they’re still healthy. The older you are when you buy the
coverage, the higher your premium.
4.
Decide
how long you want the policy to pay benefits. The longer the period it pays, the higher your premium. The most popular choice for the
coverage period is 3 to 5 years because that covers the average 2.5 year stay and
still gives you some “wiggle room” if you need coverage beyond that point.
5.
Think
about how much you want your policy to cover per day. Check around with local long-term care facilities and see
how much they cost per day. The
cost will vary according to the care provided and your location. If you want to remain in your home,
plan for a higher daily cost.
6.
Make
sure your policy takes inflation into account. Just like everything else, the cost of long-term care will
continue to rise and will probably cost considerably more when you actually
need the coverage. On average you
should plan for an increase of about 5% per year.
Long-term
care insurance is a great way to protect your assets and make sure that you
have the help you need when you get older. There are a lot of options out there when it comes to
insurance providers, benefits and costs.
Let us help
you make the right financial decision for you and your family.
Other Options! Long-Term care insurance is not the solution for everyone. There are a number of other planning options available. For more information on the non-insurance options, click on the Long-Term Care and Medicaid Planning link to the left.
Please contact our office with any questions you may have, or to schedule an appointment to discuss your long-term care plan (or make one if you don't have one).