Sure, it’s an easy assumption that premium costs will be expensive, and the cost of healthcare inflates at the same rate for everyone. However, do not simply purchase a policy based on some general national average need or cost you might have been pitched.
Long-Term Care insurance should be approached from a personal set of conditions, just like every other portion of your financial plan. Based on your retirement plan, how much insurance coverage do you need, and how much of your investment assets or other financial resources are you willing to earmark for Long-Term Care expenses? The cost of your premium and amount of coverage needed will depend on your answers.
For example, a retired couple may have enough saved to pay for one spouse’s Long-Term Care projected costs, and only need/want an insurance policy for one spouse. On the other hand, a couple may decide that, even though both have enough savings to cover Long-Term Care expenses, both spouses agree they would rather give the majority of assets to their children upon death and prefer not to allow Long-Term Care costs to reduce the value of their estate plan. Therefore, this particular couple wants coverage for both spouses. Now, do they want in-home care coverage or nursing home care coverage? And, for how many years?
Below are some facts about Long-Term Care and how it works. As always, consult a fiduciary advisor before committing to any policies.
Long-Term Care insurance serves to support personal care necessities. In addition to medical care, Long-Term Care insurance provides assistance with the basic personal tasks of everyday life, or Activities of Daily Living (ADLs), including:
Long-Term Care services can also assist with everyday tasks or Instrumental Activities of Daily Living (IADLs), including:
The following is according to the U.S. Department of Health & Human Services from the office of the Assistant Secretary for Planning and Evaluation (ASPE):
A few other facts associated with Long-Term Care:
While the cost of Long-Term Care insurance coverage can certainly present challenges to a financial plan, there are options we are happy to discuss with you that may assist in funding your premiums. In addition, we can assist in structuring your retirement plan to determine the need and financial impact of implementing Long-Term Care insurance coverage.