Should You Consider Long-Term Care Insurance?
In 1900, the average life expectancy for Americans was 47.3. Today it’s 77.8. Given medical advances, it’s reasonable to expect that this number will continue to increase.
Not only are people living longer, they’re living longer with conditions that may necessitate assistance, whether via home care or nursing home facilities or something in between. Given this knowledge and the aging baby-boomer population, many people are evaluating their long-term care (LTC) options.
What Is Long-Term Care (LTC) Insurance?
Many people are confused about where health insurance ends and LTC insurance begins. Put simply, LTC applies to situations that aren’t going to improve — where maintenance is the desired outcome. Depending upon the policy you select, LTC insurance may cover:
- Skilled services (nursing care and physical, occupational, respiratory, and speech therapy)
- Home health care (assistance with personal hygiene and managing medications)
- Homemaker and chore services (meal preparation, laundry, light cleaning, minor household repairs, etc.)
- Hospice care
- Adult day care (a program that provides social activities in a group setting outside of the home)
How Expensive Is It?
LTC insurance becomes more expensive the longer you wait to purchase it. Although it’s been around for a while, it’s still a relatively immature market and field. Since the first generation has yet to complete a full series of claims, today’s pricing is based on assumptions that have not yet been demonstrated, aren’t guaranteed, and may change over time. You can also add a variety of riders, which can add to the expense.
Should You Consider It?
The answer to that question is highly situational. The important thing is to understand what you’re paying for and make an informed decision versus an emotional one. What’s the length of payment, and when does it kick in? How much does it pay? Are there inflation riders? If you have any questions regarding LTC insurance or would like assistance evaluating your options, please feel free to give us a call.
Plante Moran Insurance Agency is a member of the FINRA. Securities are offered through Valmark Securities, Inc., an unaffiliated securities broker-dealer. Member FINRA and SIPC.