Written By: Alana Kahan
November is Long-Term Care Insurance (LTCI) awareness month, and with family holidays on the horizon, there’s no better time to consider the impact that LTCI may have on your family. As benefits consultants, we see the value of LTCI every day with our clients. I also had a profound experience with LTCI in my own family when my grandfather, Stan Lang, was no longer able to care for himself.
Long-term care is something that people don’t want to think about (understandably), but this often means they realize they want or need it when it’s too late to get it. Planning ahead is key to using LTCI effectively. Here is real talk on LTCI to help you weigh your options.
What is the definition of Long-Term care?
Long-term care is defined as support for the activities of daily living – bathing, dressing, eating, toileting, continence, and transferring (mobility). People can need Long-term care for cognitive or physical reasons.
Your long-term care needs are not covered by medical insurance, and Medicare provides limited coverage, underscoring the importance of considering long-term care insurance.
How does it work?
Long-term care can occur at home, a part-time adult care facility, or an assisted living or nursing home facility. The average cost of a private nursing home room in the U.S. is over $9,000 monthly, which can quickly drain a family’s resources. Long-term care insurance provides financial support to cover these costs.
Do I really need it?
After someone turns 65, they have almost a 70% chance of needing long-term care in their remaining years. Without long-term care insurance, a family’s options for caring for a loved one are much more limited. LTCI helps a family to make decisions based on what’s best for their family rather than making a decision based on cost alone.
When is the best time to get it?
People can consider getting LTCI as early as 40, but people typically buy it between ages 50 and 65. As a rule of thumb, the earlier you purchase it, the lower your premiums, resulting in savings over time. It’s best to speak with someone about your full financial picture before deciding so LTCI is part of your integrated strategy.
Furthermore, people who wait to purchase long-term care have a harder time getting approved for coverage when they are older. Underwriting in the long-term care space is tough and much less lenient. Essentially, you need to be medically and cognitively healthy for consideration.
On a personal note, LTCI relieved my family during a difficult time a few years ago. It relieved our family from the financial burden of the cost of care and relieved us from the emotional roller coaster of being full-time caregivers. It also gave us the gift of time – time we could spend with my beloved grandfather, sharing family togetherness in his last year, knowing his needs were covered.
In his late forties, he started earmarking dollars for future care through a long-term care policy. We added consumer protection with products that could serve multiple areas, such as hybrid programs, life with a long-term care rider, or guaranteed premium traditional long-term care. Because of our integrated strategy for my grandfather, he received care when he needed it. We chose when the money would be used, his nest egg and retirement were protected, and our family had assistance.
LTCI may not be the right answer for every family, but it’s something all families should consider. To talk about your own personal situation and whether or not LTCI is right for you, contact us.