Think Long Term: Long-Term Care

With health care costs skyrocketing and Americans living longer than ever before, an increasing number of us face the possibility that we, or our parents, will require some type of long- term health care at some point down the road—an eventuality none of us can afford to ignore. Planning for the expense of Long-Term Care has become an integral part of sound financial planning.

What Is Long-Term Care?

Long-Term Care (LTC) is the personal and/or medical assistance required over an extended period of time because of a chronic or disabling condition.

Why Consider LTC Insurance?

Independence – Because you won’t have to depend on family for care.
Assure quality care – Because you have the freedom to opt for the best available care.
To leave an inheritance – Because you want your money to go where YOU have chosen.
To not be “wiped out” – Because you want to know your money will last as long as you need it.
To protect your spouse’s lifestyle – Because you don’t want to lower your spouse’s standard of living while you’re incapacitated.
To protect your principal (assets) – Because part of your retirement income is derived from nest egg earnings, and you don’t want to eat away the principal.
Peace of mind – Bottom line: You just want all bases covered, where no health crisis can pull the financial rug out from under you.

Myths

Medicare will cover it – Medicare will cover only 20 days of skilled nursing care—and only after a 3-day hospital stay. You have to spend your assets down to poverty level to qualify for Medicaid. And even then, assisted living and home health care are not covered under Medicaid.
LTC is just for old people – 40% of people in nursing homes are working-age adults between the ages of 18 and 64.
LTC insurance costs too much – For less than a $1,000 a year, a 60-year old can buy facility coverage (nursing home and assisted living facility) with lifetime benefits.

Best Age To Buy LTC Insurance

You should get LTC insurance at the earliest possible age for the following reasons:

You will pay more money by waiting. At age 55, you would pay thousands less over thirty years than a 65 year-old would over twenty years for the same policy. Not only would the same policy be more expensive if you wait until you are ten years older, but you would also have to purchase 70% more coverage to equal the benefit that would have grown due to the inflation protection.
While waiting, your health could change, making you uninsurable. The conventional wisdom is, get it while you can qualify. The fact is that over 30% of applicants applying for LTC insurance nation-wide are declined due to health reasons.