Long-Term Care

Long-term care is a variety of services which help meet both the medical and non-medical needs of people with a chronic illness or disability who cannot care for themselves for long periods.

According to the U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information approximately 70% of those over age 65 will require at least some type of long-term care services during their lifetime. Over 40% of these will need care in a nursing home for at least some period of time. The factors that increase an individual’s risk of needing long-term care include:

• Age – The risk generally increases as you get older
• Marital status – Single people are more likely to need care from a paid provider
• Gender – women are at a higher risk than men, primarily because they tend to live longer
• Lifestyle – poor diet and exercise habits can increase your risk
• Health and Family History

Although it is difficult to predict how much or what type of care any one person might need, on average, someone age 65 today will needed some long-term care services for three years or more.

As of July 2021, the national median cost for a private room in a nursing home is 8,821 per month according to Genworth’s Cost of Care Survey so it’s easy to see why planning for potential long-term care expenses is crucial to your financial success.

Stand alone long-term care policies have gone away due to their continuous price increases and hybrid long-term care policies are now the only way to insure for long-term care.

Hybrid long-term care policies are life insurance policies with a long-term care rider. The premiums stay level and do not increase over time.

How they work – You purchase a policy for a death benefit amount of your choice say 500,000. You pay either a single pay premium or level premium annually for as long as you wish to keep the policy. If you need long-term care, you then can access the policies full death benefit to use for long-term care expenses. If you don’t use the long-term care rider the full death benefit is paid to your beneficiaries upon your death.

Policies can be reimbursement based or indemnity based.

Reimbursement based policies pay for your long-term care needs but no more than the actual cost of those services.

Indemnity based policies pay you a set amount per month no matter how you choose to receive care.