Long Term Care
The need for Long Term Care (LTC) has exploded in recent years to the point that nearly 3 out of 4 Americans turning 65 today will require some form of LTC in their lifetime.
Need for Long Term Care
The need for Long Term Care (LTC) has exploded in recent years to the point that nearly 3 out of 4 Americans turning 65 today will require some form of LTC in their lifetime. For men the number is 1 of every 2 men will require LTC and 2 of every 3 women will need LTC. That means you will most likely need LTC before you pass away.
The reason for this is that you are more than likely to live longer than previous generations, families are more dispersed geographically, and most of us are unwilling or unable to re-locate for the purpose of having a family member provide LTC.
On average a man will require just over 2 years of LTC before he passes while the average woman will need just over 3.5 years. At an average cost of $100,000 per year for LTC how long will your savings nest egg last?
he 3 most common ways to fund the cost of LTC are 1) Self Pay, using your life savings and income, 2) Government Assistance, using Medicare and Medicaid programs, 3) Insurance, have a policy in place that pays your monthly cost of LTC when needed.
SELF PAY: Let suppose that you and your spouse have accumulated $1,000,000 in assets over your lifetime. Then one or the both of you need LTC before passing. Remember the average length of time you will need care is 5.5 years. 5.5 X 100,000 = $550,000 spent out of your nest egg. Congratulations you made it and probably left you children $0 cash and a home that will need to be sold to realize any cash inheritance. Or perhaps a home that one of the children will inherit and need to mortgage so they can pay their siblings their fair share. Either way, not the ideal situation you envisioned while working all your life. The good news is you will receive care and more than likely will have a choice in whether you receive care at home or in a facility of your choosing.
GOVERNMENT: Unfortunately you were not able to accumulate a sufficient nest egg to self pay for your LTC and must rely on the federal and state government to assist in providing your care. The first consequence will be that you probably will not have a choice in where you receive your care. It more than likely will not be the facility of your choosing and will definitely not be provided in the comfort of your home. Secondly, your family will need to liquidate and spend down your assets in order to qualify you for government assistance. If they are able to protect/hide any of your assets there will be a requirement to “settle up” after your passing. In other words the assets you worked and strived for all your life will be used to reimburse the government for assisting you with providing LTC. Your family will receive little if anything you wished to pass onto the next generation.
INSURANCE: Again, let’s suppose you have accumulated $1,000,000 in assets over your lifetime. You and your spouse take the time to study and plan for eventual need for LTC in the future. You find a company that you trust and purchase a LTC policy that will provide up to 6 years of coverage for both of you when needed. You pay a premium of $700 per month for a policy that covers both of you, whether you need in home care or facility based care. When the time for LTC arises you and/or your family will decide where you will receive the care, who will provide the care, and how frequently you will receive the care. Most importantly your family will be able to coordinate your care and remain your family instead of becoming your caregivers in order to protect your assets and their inheritance. You protect your family from the emotional, physical, and financial toll that LTC exacts on your loved ones. It really is that simple.
How to Pay for LTC
Self Pay
Government
Insurance
Something to Consider
No one wants to wind up in a LTC facility, having to spend down their assets, or worse yet having their children provide their daily needs in order to avoid going to a facility. We hear people very often say, my daughter is a nurse, she will take care of me. My kids are close by, they will check on me.
We are talking about you needing daily care for life’s necessities or even round the clock care. Do you really want your children attending to your needs every day? Helping you get dressed every morning, bathing you, fixing your meals, feeding you, taking you to and from the toilet, helping you to and from the bed every evening? The real answer is probably not or even a resounding NO!
We can help with all those questions, we have lived through this ourselves and have helped plenty of others with these concerns.
The ideal time to acquire LTC coverage is between the ages of 50-55 for both men and women, yet the best time to ask questions and decide if LTC is something you need is right now. Call us for an obligation free, no pressure discussion, regarding all your options.