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Winter 2021  Volume 14, Number 4        

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Planning for Care When You Need It Most

If you are still young, long-term care may not be on your radar. However, long-term care insurance can be a worthwhile investment, especially if your family has a history of needing long-term care.

Here’s what you need to know to determine whether you need long term care insurance.

Do You Need It?

The Administration on Aging, the principal agency of the U.S Department of Health and Human Services designated to carry out the provisions of the Older Americans Act of 1965, estimates that in the next 25 years, the U.S. population will include 82 million Americans over the age of 65. The vast majority will require some type of long-term care as they get older.

In addition, the American Association for Long-Term Care Insurance posits that the lifetime probability of becoming disabled in at least two daily living activities or of being cognitively impaired is 68 percent for people age 65 and older.

While it’s impossible to predict the future, it’s wise to look at these factors:

  • Family Tree: While medical technologies and medications help increase the years we live, it also can increase the need for long-term care. Take a look at the members of your extended family — your grandparents, parents, aunts, uncles and siblings. Have they needed long term care because of advanced age or a disability? The more people in your family have needed care, the greater the chance that you will too.
  • Financial Resources: The biggest factor is how much money you have to put toward care in the future. If you are currently getting by with little savings and expect to rely on Medicaid during your retirement years, you will need insurance. If you have huge retirement and savings accounts, you probably can pay for your care out of pocket. If your financial situation is in between, then long-term insurance could be a great benefit. Experts say that if you need care for more than four or five months, long-term care insurance can be worth it.
  • Family Assistance: Many people rely on family members for care, but with more families separated by distance, it’s can be difficult. Even if relatives are available, it can be physically demanding to care for someone else. Long-term care insurance helps reduce the burden of care.

What it Could Cost

Long-term care insurance can provide peace of mind and help pay long-term expenses if necessary, but it comes at a cost — monthly premiums. The question is whether you can afford those premiums. And, keep in mind, you may not need to use the coverage.

According to the American Association for Long Term Care Insurance, the average long-term care policy annual premium for a healthy 65-year-old male is about $1,400 with total benefits of about $162,000. The average cost of a long-term facility can be more than $10,000 per month, meaning benefits could run out in a little more than a year.

The good news is that there are different levels of coverage. If you don’t want to pay for a “Cadillac” policy, you can get a “base model” policy that pays $100 per day. With an inflation rider, it may be enough when combined with your Social Security and retirement income.

Please call us for more information.


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In this issue:

This Just In...

How to Avoid Challenges to Your Disability Claim

Planning for Care When You Need It Most

Errors to Avoid If You Inherit an IRA

Life Insurance for the One Who Makes a House a Home


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