Working Hard for Tomorrow
Chances are you have put in many long and hard day’s of work. You’ve learned new skills and have worked towards earning a decent living. Many Americans clock in and out to secure a better present and future for themselves and their families. Putting in the work now so that may one day retire comfortably.
Long-term care insurance can help you keep it this way. With an estimated 70% of individuals aged 65 and over needing care each year and health insurance not covering those costs, long-term care insurance can be crucial.
Long-term Care
The majority of those 65 and older will soon require help with daily activities such as dressing, bathing, transferring,and more. This type of care is usually considered custodial in nature and therefore, not covered by health insurance. This can leave many seniors with the overwhelming need for care and a hefty bill to match. Over half of those requiring long-term care will spend up t0 $107,000 in expenses.
Most of us do not like to consider our future long-term care needs because we do not like to envision a world where we can no longer remain fully independent. However, we will all age and we will all likely need this type of care. Seeing as how this type of care is not usually covered by health insurance, having a plan in place is vital.
The Costs Explained
The costs of your long-term care will vary depending upon your individual needs. Women are more likely to need care than men and are also more likely to need care for a longer duration of time. On average women tend to require 2.5 years of care and men 1.5. Some average costs associated with care are as follows:
- National average for a home health aide- $23.27 /hr
- Private room in a nursing home- $103,660/ yr
These costs can add up rather quickly and significantly affect your financial portfolio. This means, the portfolio you have spent years building up can easily be diminished when you fail to plan for long term care. This is why planning for long-term care and understanding your various options can make all the difference.
Long-term Care Insurance
Long-term care insurance was designed with the idea of helping individuals afford the long-term care they need without depleting their assets. It is a flexible solution created with you in mind and offering a variety of options. It is they key to protecting your family and assets form the financial and emotional burdens of a long-term care event.
You will want to consider LTC insurance at a time when you are healthy in order to qualify for the best premiums and coverage. Holding off until you are ill or need care may disqualify you for coverage all together. This is why it is usually advised to begin your research as early as possible.
Traditional Options
Those searching for simple long-term care coverage or options may choose to opt or traditional long-term care insurance. This usually entails comprehensive coverage for facility care options or paid family care. These policies also offer some customization to best suit your needs and desires. This is an ideal option for those who already have their life and retirement plans accounted for and simply need some long-term care benefits.
Typical environments to utilize this type of coverage in include:
- Skilled Nursing Homes
- Home Health Care
- Assisted living facilities
The costs for these plans will vary upon your state, region, and individual health profile. Some of the top rated insurers for this product include:
- Nationwide
- Mutual of Omaha
- Massmutual
- New York Life
- Genworth
- TransAmerica
Hybrid Insurance
For those who with more versatile needs there exists hybrid long-term care insurance. This type of coverage offer the best of both worlds life insurance + long-term care benefits. This is perfect for those worried about never needing their long-term care policy. This product offers long term care benefits should you need them and life insurance should you not. Need both? No problem!
These policies are usually paid over a set time and feature money back guarantees. These benefits can be used towards facility care, home care, and even paid family care. Even if you use all of your long-term care benefits your family can still receive a death benefit. Some of the top rated insurers for this product include:
- Lincoln MoneyGuard
- Nationwide CareMatters
- Mutual of Omaha
- National Guardian
- Minnesota Life
- John Hancock
- Mass Mutual
- One America
- Pacific Life
Will the government fund my future care?
Some individuals believe that their future long-term care expenses may be accounted for by the government however, this is a common misconception. The government will only cover the costs of some medically needed health services.
These services must also meet specific criteria and fall into certain brackets as well. Long-term care is not typically considered a medical service and therefore, at most medicare would only cover 100 days of rehabilitative services within a nursing home. Medicaid will only cover a portion of long-term care given you fall within a specific low- income level. Long-term care insurance will ensure you have some income specifically earmarked for your own long term care.
Questions to ask
The best time to purchase long-term care insurance is usually between the ages of 50-65, or before you actually need care. This will help increase your chances for a better rate class as well as approval.
Planning ahead will be instrumental to the affordability of your future long-term care, meaning you should shop for long-term care insurance before you ever need care. When choosing which company to elect for your long-term care insurance policy consider the following questions:
- What qualifies for coverage under my LTC plan?
- What are the ADL’s required for payout of benefits?
- Does my plan include special circumstances for cognitive impairment?
- Did I compare qualifying Activities of Daily Living for various plans?
- If I die and never used my coverage what happens?
- Should I elect single or shared coverage?
- What is my inflation protection rate and will my premiums go up?
- Do I have a monthly or daily amount on the claims process and is it capped?
- What is the max time benefits are payable for? Can I extend this time?
- How long is my policy waiting period, if any?
Other Factors to consider for Retirement
Hopefully you have found that these are the years where your overall bills have begin to lessen and your income has steadily increased over the years. So now is the time where you must determine which type of lifestyle you have been living and which kind of lifestyle you wish to carry on later in life. Ask yourself “do I have the means to do so“? Here are four other major topics you should start a conversation about immediately if you are in your 50’s or over:
Your Savings
At age 50 the IRS will allow you to start placing more tax advantaged savings into your retirement accounts. At this stage in life you should be spending less than you are saving in order to ensure you will have the funds to support yourself in the later years of life when you do choose to retire.
Your Investments
You should meet with your financial advisor to review all of your financial investments and secure/ redirect their progress if need be. At this stage in life it is probably best to steer away and protect your funds from risky and volatile investments.
Your Debt
If you have accrued bad debt throughout your life, now is the time to really focus on getting rid of that debt and restoring your credit. Credit card debt and student loans can really impede on your ability to save and as previously mentioned, saving as much as possible should be a top priority at this stage.
Consider Your Options
Whether you opt for traditional, hybrid, or no coverage will ultimately be up to you. The best route is to explore your options, evaluate the costs, and make a plan for how you would tackle your potential needs. Talk to your family about how you would like to be cared for and write it down.
Doing so now can help ease some of the future burdens and stressed of having to plan a loved one’s fate when they become ill. Knowing where and how to access the care you need can greatly improve your quality of life. You’ve worked hard for a beautiful retirement so don’t let the expected unexpected stop you from living the life you imagined. Work with a trusted agent or advisor and begin your long-term care research today.
If you or someone you love is interested in Long Term Care or Long Term Care Insurance be sure to visit: LTC TREE for more information.
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