Long-term care (LTC) has been called “the greatest uninsured financial risk today.” That’s because most costs for extended care needed during recuperation from strokes, accidents, illnesses, and operations are not covered by health insurance or Medicare.
LTC is the care you may need at home if you are unable to perform daily activities on your own, such as eating, bathing, dressing, or going to the bathroom. It may also include care in the community, such as in an adult day care facility.
Long-term care insurance (LTCi) provides coverage for quality LTC that may be needed at any time in life. Without LTCi, these costs are paid from one’s personal savings and assets.
Fortunately, LTCi policies can be tailored to cover varying circumstances. They are not one size fits all. When deciding which coverage you’ll need, here are some things to consider:
How much can you afford to contribute toward the expense of your care?
For how long might you need LTC services?
How much will time pass before you need to start receiving benefits from the policy?
What’s the anticipated cost of LTC?
Associates of Clifton Park is our long-term care partner. They are looking forward to sharing their years of expertise with you to help you make informed decisions about your long-term care insurance options. Let them help you build a policy that fits your needs and budget.
If you purchased a long-term care policy prior to January 1, 2020, please refer to your policy documents for information.
The chances of needing long-term care usually increase as you age, but It is important to recognize that at some time in your life you may require these services. It is important to recognize that at some time in your life you may require these services. Risk factors for needing LTC include:
Life expectancy: The longer you live, the more likely it is that you will need LTC.
Gender: Women are more likely to need LTC because they live longer.
Married or single: If you are married and have adult children, you may be more likely to receive informal care at home.
Health factors: If poor health runs in your family, you could be at greater risk than another person of the same age and gender.
The need for LTC impacts not only the person who needs care, but the entire family. In 2017, about 41 million family caregivers in the U.S. provided an estimated 34 billion hours of care to an adult with limitations in daily activities (AARP’s Valuing the Invaluable series). Caregiving can be stressful and exhausting for the caregiver and may also impact their partner, children, and work obligations as well as their own finances. Services available through LTCi may help you remain independent and lesson the burden on family.
Before you need LTC, ask yourself:
Would I prefer to move into a residential facility?
Would I rather get care at home?
Which person or people do I want to provide my long-term care if I need it?
Will they want to give care?
Will they be able to provide care?
If a friend or family member devotes time to my care, could there be a negative impact on that person’s career, earnings or financial well-being?
Could their relationships with their children and spouses become stressed?
These costs assume only one individual will need care; costs will increase if both spouses require care. The above costs are for basic care only and does not include special services, medications, and other expenses associated with extended personal care.
All such costs are funded by after-tax dollars, and the actual lifetime cost of care may be much higher when rising costs/inflation and loss of investment income are factored in.
Your options for paying for long-term care (LTC) include:
Paying out of your own pocket, in which you risk depleting a lifetime of savings.
Applying for Medicaid. However, you will be required to spend down your assets to meet federal and state requirements to become eligible.
Purchasing an individual LTC insurance policy.
Most health insurance policies, including Medicare and Medicare supplements, do not cover most LTC costs. Medicare doesn’t cover LTC if that’s the only care you need.
If you want or need any type of LTC, long-term care insurance may help cover the cost. Everybody has different preferences. Associates of Clifton Park (AoCP) can help you tailor a long-term care insurance policy to suit your personal situation.
Myth: Health insurance, or Medicare, will cover long-term care costs.
Fact: Even the best health insurance was not designed to cover unskilled (custodial) care that’s often needed during recovery from strokes, serious accidents, or chronic health conditions. After the first 30–90 days, neither health insurance nor Medicare will pay for custodial care, which means the costs must come from personal savings and assets.
Myth: My family and I probably won’t need long-term care.
Fact: Although being older increases the chances of needing long-term care, an accident or illness at any age could result in the need for long-term care services. Long-term care (LTC) protection can help people get the type of care they want—when, where, and how they prefer. Beyond nursing home care, LTC protection can provide benefits for a whole range of medical, personal, and social services in a variety of settings—home, community, assisted living, and skilled nursing facilities. Without long-term care insurance (LTCi), your financing options would be limited.
Myth: It pays to wait on purchasing LTCi until I’m older.
Fact: The truth is that LTCi premiums are based on your age when you apply. Waiting to make the purchase means paying potentially higher age-based premiums, needing more protection, and risking being declined. You will pay less if you purchase insurance when you are younger and in good health.
Myth: I won’t need LTCi because my family will take care of me.
Fact: It’s impossible to know for sure if your family would be able to care for you if LTC becomes necessary. If your family members live far away or are unable to balance out work or family obligations, they may not be able to realistically help even if they want to. And caregiving can be a huge financial and emotional burden. In fact, according to Genworth Beyond Dollars 2018, 63 percent of caregivers end up using their own retirement and savings funds to pay for care.
Myth: My savings will cover my long-term care.
Fact: The average annual cost of care in Wisconsin is:
$108,259 for a semi-private room in a nursing facility.
$68,640 for 44 hours/week of home health care with a home health aide.
$55,200 for a private one-bedroom assisted living facility.
You could experience a dramatic difference between your income and expenses if you experience a chronic health condition that requires long-term care (LTC). The program options available from Associates of Clifton Park (AoCP) can help you offset expenses and help protect your future—without spending your nest egg or trying to qualify for a government program.
Because your first claim might be years into the future, it’s essential to obtain your policy from a trusted source to ensure that customer service and insurer funding will be available at the time of need.
“Almost twenty years ago in 1998, my wife and I attended a long-term care insurance seminar sponsored by WEA Member Benefits that was being held in the library where I worked. Before the meeting we didn’t know much about it, but a combination of what we learned that evening and then after some additional discussions with one of Member Benefits’ specialists, we decided to purchase the Transamerica policy we have now. One of the important factors in our decision was the fact that the company had been investigated by Member Benefits. Over the years we’d learned to trust their recommendations………………………………….. (NEEDS EDITING FROM ORIGINAL https://www.weabenefits.com/Insurance/Long_Term_Care/Long-Term_Care_Insurance/)
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Retired Librarian, Waunakee School District
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