3 min read
It might be hard to imagine now, but chances are you’ll need some help taking care of yourself at some point in life. The big question is: How will you pay for it? Long-term care refers to a host of services that aren’t covered by regular health insurance. According to Medicare estimates, at least 70% of people over 65 will require long-term care services at some point. And 15.5% percent of people under 65 will need long term care.


Long-term care can be expensive, depending on the amount and type of care needed. In 2018, the cost of a year in a nursing home averaged around $92,376* for a private room (up 4.2% from the previous year). If you received personal care in your home from a home health aid three times a week, the bill would amount to about $4,385* a month.

Planning for the potential of long-term care costs is an important part of any long-range financial plan, especially in your 50s and beyond. People plan for long-term care for three reasons:
  • To protect savings. Long-term care costs can deplete a retirement nest egg quickly.
  • To give you more choices for care. The more money you can spend, the more choices of care you can get. If you have to rely on Medicaid, your choices will be limited to the nursing homes that accept payments from the government program, and Medicaid does not pay for assisted living in many states.
  • To protect your loved ones and legacy. By having long-term care insurance you can eliminate the worry of who will take care of you or how they’ll be able to pay for the care.

There are a number of long-term care planning options available that you should consider to make the right choice for you.
  • Are you insurable/healthy?
    • What are the triggering factors that qualify you to tap into your benefits? Often, you’re eligible for benefits when you can’t do at least two out of six “activities of daily living,” called ADLs, on your own or you suffer from dementia or other cognitive impairment. The activities of daily living are:
      • Bathing.
      • Caring for incontinence.
      • Dressing.
      • Eating.
      • Toileting (getting on or off the toilet).
      • Transferring (getting in or out of a bed or a chair).
  • Are the benefits taxed?
  • Does your plan include cost of living adjustments?
  • If the long-term care benefits are not used, is there value that can be accessed by you or passed to beneficiaries?
As you make a long-range financial plan, the potential cost of long-term care is one of the important things you will want to consider to protect your family and your legacy. You and your planner can evaluate options to identify the best one for you.

Guarantees are based on the claims paying ability of the issuing company. Long Term Care Insurance or Asset Based Long Term Care Insurance Products may not be suitable for all investors. Surrender charges may apply for early withdrawals and, if made prior to age 59 ½, may be subject to a 10% federal tax penalty in addition to any gains being taxed as ordinary income.
Please consult with a licensed financial professional when considering your insurance options. *Source: “Long Term Care Costs 2018 | Genworth.” Genworth, 2019 Education & Outreach. (May, 2016). Understanding Long Term Care Insurance. Retrieved from

Posted March 3, 2020 in Insurance News Articles


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