Long-Term Care

Failing to Plan for Long Term Care is the # 1 threat to your Financial Nest Egg!

The average cost is $60,000 to $70,000 a Year or $240,000 over the average 3 1/2 year term.

What is long-term care?

Long-term care is custodial care given at home, in adult day care centers, assisted living facilities, or in nursing homes for people with chronic disabilities and lengthy illnesses. Typically, one would need assistance with Activities of Daily Living (bathing, dressing, eating, transferring, toileting, continence) or supervision due to a cognitive impairment. Ninety-five percent of people who need long term care require only custodial care rather than skilled nursing care.¹

Most Americans believe they will never need any kind of long-term care, but…

• Once you reach age 65, there is a 70% chance of needing some type of long term care services.²
• The risk of a nursing home stay at age 85 is eighteen times greater than between age 65 and 75.⁴
• 7 out of 10 couples who reach age 65 can expect at least one partner to use a nursing home before dying.⁵
• 21% of people entering nursing homes will have a total lifetime use of 5 years or more.³
• For every one person in a nursing home, there are 4 people receiving home care.¹
• Approximately 40% of people receiving some level of long-term care are 18 to 64 years of age.²

• Nationally, the average annual cost for a private room in a Nursing Home in 2008 was $76,285 per year. or $6,357. per month. ²
• Nationally, the average annual cost for a private room in an Assisted Living Facility in 2008 was $36,096. or $3,008. per month.²
• Home care costs average about $29.an hour for Home Health Aide’s and $18.an hour for Homemaker Services.²
• A three year nursing home stay at 2008 cost’s could exceed $228,000.²
• “The greatest threat to the financial security of middle-income Americans is the cost of long-term care”

Contrary to what many seniors believe, Medicare with a Medicare Supplement only pays for 100 days of skilled, rehabilitative nursing home care and pays nothing for custodial care (help with Activities of Daily Living or a cognitive impairment).

The premium you pay for long-term care insurance is determined by the following six factors:

1. Your age at the time you apply.
2. Your health. Applicants in exceptional health may be eligible for a preferred rate.
3. Your marital status. Couples may be eligible for a discount.
4. What features you want. You can choose options like Inflation Protection and Restoration of Benefits.
5. How much coverage you want. You choose the benefit dollar amount and how much you wish to co-insure.
6. How long you want the coverage to last after you start needing care. You select a Limited or Unlimited Plan.

As you can see, determining factors #1, 2, and 3 is as simple as answering a few questions.

However, to decide the appropriate parameters for factors #4, 5, and 6 would require the applicant to make informed decisions.

Once it is established that you are medically eligible to apply for this coverage, your local Long-Term Care Insurance Specialist can assist you in “sculpting” your own personalized plan with a premium that you have selected.

What should your Priorities be when searching for long-term care insurance?

If you submit a claim to your homeowner’s or auto insurance provider and you don’t particularly like the way they handle your claim, you could easily cancel your coverage and switch to another carrier.

However, when you submit a claim to a long-term care insurance provider it will be because you can no longer independently perform certain activities of daily living or you have developed a cognitive impairment. Either one of these problems just made you ineligible to apply for coverage with another company. So, you truly only have one chance at this! Therefore, make your company and product selection with the help of a Long Term Care Specialist.