Long-Term Care Insurance – who needs it!

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Most people look forward to living a long, healthy life. They plan and invest throughout their working years with the goal of creating a financially secure retirement when they can enjoy doing the things they love most. Often overlooked in the planning is the risk of a long-term illness and the impact it has on the family and finances.

The costs associated with long-term care are significant. It can take decades to accumulate assets needed to retire comfortably, while only a very few short years of paying for long term care could threaten those savings. Moreover, the physical and emotional toll attributed to care giving is staggering. Providing care for loved ones is truly an act of compassion, but does it make sense to place these burdens on spouses, children or other family members, perhaps at a time when they may be nurturing their own families?

Many people will find it hard to envision themselves needing assistance with basic living activities, such as bathing, getting dressed, or even eating. Unfortunately, not considering these possibilities will not defer it from happening. The fact is that some 70% of the people reaching age 65 will require some form of long-term care services. The biggest unknown, however, and possibly the biggest risk, relates to the length of time one may need to receive these services.  This is impossible to predict, as some may only need a few months while others, such as Alzheimer’s patients, may require 24-hour care for ten years or more.

The cost of care is exceedingly expensive, in California running a minimum of $90,000 per year.  With inflation, in 25 years those same costs could be as much as $250,000.  This means that three years spent in a nursing home, which is less than the average, could cost as much as $750,000 in 25 years.  These estimates are based on a CPI inflation factor for healthcare of 4.1%.

Including long-term care coverage as part of your overall financial plan will help protect retirement assets, reduce the burden of care that otherwise falls on your family members, and enable one to receive care in the setting they would most prefer, including their home. Should you have any questions or desire additional information on this critical topic, please contact Richard Myerson at (424) 363-0300.