Long-Term Care Costs
Posted September 30, 2015on:
[by Russ Thornton] At some point, 70% of people over the age of 65 will need some form of long-term care and support.
I get a lot of questions from clients about long-term care insurance.
Yet, I find many people are more willing to discuss their estate planning (and their mortality) than the possibility of finding themselves in a situation calling for long-term care.
Typical objections to insurance for long-term care include:
- It’s too expensive,
- My kids/spouse/family will take care of me,
- I’ll pay for it myself out of my savings and investments,
- or something else.
And let me mention the fact that I don’t sell long-term care or any other type of insurance, so I’m not sharing this information to motivate you to buy something from me.
In fact, long-term care insurance isn’t necessary for many, despite many insurance companies’ and agents’ best attempts to use fear-based tactics to sell you policies.
Typically expensive policies. They have to build those commissions in there somewhere.
I’m interested and motivated in helping my clients live their best life and make smart financial and lifestyle decisions, and that could include a need for long-term care coverage at some level.
Or it might not.
This article isn’t the place to make that kind of recommendation or decision.
To put this in perspective, let’s consider the potential costs of a long-term care need.
Just remember, many of these websites are presented by less-than-objective insurance companies that want to convince you that you need what they want to sell you.
Many of the women I work with are involved in caring for their aging parents or other family and friends as well. So this need might arise sooner than you think, even if it’s for someone else.
Long-term care coverage is a decision that should only be made in the context of your broader financial situation and planning, but whether you elect to purchase coverage or not, it’s something that is certainly worth your consideration so you can evaluate the costs and benefits.
And remember, it doesn’t need to be an “all or none” situation. Based on the estimated costs in your area, you could buy a policy to cover 50% of a projected need. This way you could think of it as co-insurance, where you pay part of the cost and the insurance picks up the rest.
Or instead of a high cost long-term care policy, many Medicare supplement plans include the cost of home health care for much more reasonable premiums. This might be the best solution for many of you.
If you have questions about long-term care needs, or want to evaluate long-term care as part of your comprehensive financial plan, let me know. I would be happy to introduce you to a couple of expert resources that I know and have worked with for years to help evaluate long-term care needs.Often, the recommendation is that your money is better spent elsewhere, but it’s worth having the conversation and making sure you understand your choices. And the trade-offs among them.
Schedule a Discovery review with me, or get my white paper for free: The Informed Investor: 5 Key Concepts for Financial Success.