An in-depth look into Long-Term Care Insurance
It’s something many of us don’t want to think about: what will you do when get older and need assistance? Many clients Staggs Financial Services help are answering this question for the first time. They’re not alone. A new survey by HCG Secure in partnership with the Arctos Foundation shows “when it comes to long-term care coverage, the middle-income market often falls through the cracks”.
If you just turned 65, you have “a 70% chance of needing some type of long-term care service and support” in your remaining years, according to the U.S. Department of Health and Human Services.
However, “most people aren’t even talking about long-term care at all. More than half (57%) haven’t discussed their long-term care needs and preferences with their family or friends” the HCG Secure survey found.
The lack of conversation is concerning. In our experience, when there is discussion regarding long-term care many clients also don’t know what it is or may think other policy riders will cover it - when that’s not necessarily true. Many times, a policy specifically needs to have a long-term care rider attached to the policy in order for long-term care to be covered. (The chronic illness and terminal illness riders typically refer to other types of care.) Long-term care covers these six necessities: eating, bathing, dressing, toileting, transporting, and walking or moving around. A long-term care policy may provide coverage for home health care, adult day care, hospice care, or respite care. Many times long-term care policies will kick in when someone is unable to perform two out of the six above activities. (It is worth noting acute care is not covered under a long-term care policy.)
Another fallacy is many people think Medicare will cover these activities. That may not be the case. Most respondents “underestimated their actual need by $20,000”, found the HCG Secure survey.
In the state of Missouri, Nationwide data shows long-term care in 2023 costs an average between $31,000 - $74,000 annually. In ten years, that’s estimated to increase to $42,000 - $104,000 each year. In twenty years, that’s estimated to increase yet again to $56,000 - $147,000 annually. Home care remains the least expensive of all the options with nursing home care being the most expensive.
By not communicating about the future, there are three main problems: first, by the time many people realize they need long-term care insurance they are not able to afford it. Second, it will be hard for people to get the help they need without this type of insurance. Third, if they don’t have any long-term care insurance in place and then they need it, they are usually left using what inheritance they had set aside for future generations.
So, what can be done to prevent this from happening to you? Schedule a free consultation with Staggs Financial Services and together we can plan for your future.
Nationwide Report