If you haven’t thought about long-term care insurance (LTC), now is the time to do so. Whether you worry about paying for long-term care in your later years or you want financial protection in case you get sidelined by an accident or prolonged illness in the near-term, a long-term care insurance policy could make sense. Here’s why:
Why should I get long-term care insurance now?
What is long-term care insurance?
Long-term care insurance is designed to help you cover the costs of care not covered by health insurance, Medicare or Medicaid over a fixed period of time. Traditional health care policies do not cover long-term care arrangements. LTC policies reimburse you a fixed, daily dollar amount toward medical care such as professional, in-home support, an assisted living facility or nursing home, or if you’re disabled and can’t work.
Why is it important to have long-term care insurance?
More people need long-term care due to an accident rather than an illness.
Accident
- 2010: 11 percent of recipients needed care due to an accident
- 2015: 19 percent of recipients needed care due to an accident
Illness
- 2010: 44 percent of recipients needed care due to an illness
- 2015: 35 percent of recipients needed care due to an illness
How long will I need long-term care?
71 million Americans will be aged 65+ by 2030
70% of Americans aged 65+ will need some long-term care in their later years.
59 = Average age of a long-term care policy purchaser
Women are likely to live longer than men and will need to plan for care.
- Women born in 1960 are expected to live to age 73 or longer
- Men born in 1960 are expected to live to age 67
Will you be able to pay for care later in life?
The cost of medical care continues to rise
An LTC policy makes sense considering paying for long-term care out of pocket can quickly reduce your nest egg.
| Type of Service | Estimated monthly cost | ||
|---|---|---|---|
| Home health care | 2019 | 2029 | 2039 |
| Adult day care | $1,170 | $1,572 | $2,153 |
| Assisted living facility | $4,000 | $5,376 | $6,670 |
| Home health aide | $3,813 | $5,124 | $6,887 |
| Homemaker services | $3,813 | $5,124 | $6,887 |
| Nursing home care, private room | $7,057 | $10,301 | $13,844 |
| Nursing home care, semi-private room | $7,665 | $9,484 | $12,746 |
LTC policies may protect your finances
Without an LTC policy, you could be faced with tapping into your savings or retirement funds to pay for care.
- 62%: Pay for care with their own savings/retirement funds
- 45%: Reduce their quality of life due to the costs of care
- 38%: Reduce contributions to their savings and retirement accounts due to the costs of care
Plan now to cover the cost of long-term care, later.
Sources
“Long-Term Care Cost Study” Prudential Research Report, 2010.
“Genworth Cost of Care Survey 2018 conducted by CareScout®”
“Long-Term Support and Services,” AARP Public Policy Institute
Prudential, “Long-Term Care Cost Study”
Prudential, “Long-Term Care Cost Study”
“Long-term Care – Important Information for Women,” American Association for Long-Term Care Insurance (AALTCI)
AALTCI, “Long-term care - Important Information for Women,”
Genworth, “Cost of Care Survey 2018,”
“Long-term services and supports for older Americans: Risks and Financing Research Brief.” Favreault, M., Urban Institute and Dey, J., Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health & Human Services
Is it time to consider long-term care insurance?
Find out what to look for in a long-term care insurance policy or discover more topics to help you plan for retirement.
The advice provided is for informational purposes only. Contact your insurance advisor for additional guidance.