Protect Your Financial Legacy
Long-Term Care Insurance
How will you pay for retirement’s largest expense?
With longer life expectancy and the cost of care rising, every person owes both themselves and their families to investigate long-term care insurance. In fact, 70% of those turning 65 will require some sort of long-term care during their lifetime.
Long-term care insurance covers a wide range of services and costs in the event of a chronic medical condition, disability or disorder. Qualifying disorders can be Alzheimer’s or other memory impairment, or not being able to do two or more activities of daily living such as bathing, eating or dressing.
Policies can differ but most will reimburse for a variety of different care services including:
- Home Health Care
- Nursing Home
- Assisted Living
- Adult Day Care
- Home Modifications
Most of these services are not covered by health insurance, Medicare or Medicaid. Strict rules regarding long-term care reimbursement from these groups are difficult and may not include your first choice of facilities or providers.
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The Cost of Not Having Long-Term Care Insurance
Don’t risk your financial security
Without preset income set aside, most individuals will have to dip into their nest egg, or retirement savings, to pay for care. Note that these are just the current prices and will only continue to rise due to availability shortages and rising costs.
- Home health aide – $50k+
- Homemaker services – $48k+
- Adult day care – $18k+
- Assisted living facility – $45k+
- Nursing home care – $80k+
Government programs are only available once all savings and income is exhausted. Transferring funds from someone’s account to make their income look lower and qualify for government aide is fraud and closely monitored. Unfortunately for those depending on government programs, there can be a long waiting list.
The costs for care can quickly deplete any savings and looking back you may ask yourself; did I work hard and save as much as I could to pay for something that could have been covered by an insurance policy?
The Benefits of Having Long-Term Care Insurance
- Protect what you’ve saved. Of course, you saved to take care of yourself so you wouldn’t be a burden to your loved ones. But the costs of full-time care can easily equal almost a million dollars or more over a 20 year period, per person. Did you build up your savings all your life to have that money go to healthcare? Or did you plan to travel, leave an inheritance, or make a charity contribution? Make sure you can enjoy your retirement as well as leave the legacy you had planned.
- Freedom of choice. We’ve heard the stories of substandard elder care. No one wants their loved ones or themselves in that position. Long-term care insurance will empower the holder to choose what type of care you receive and where. Having proper funds will provide you with more options when selecting care providers.
- Peace of mind. No more worrying about what will happen “if the time comes”. Enjoy the present and have fun with retirement savings without agonizing about saving money for later care.
- Age in place. More options for home care means you may choose to stay in your home, your neighborhood and near family, friends and church. Modifications and home health aides can help delay moving into a care facility.
- Ease the burden of loved ones. Many adult children become the “sandwich generation” caring for both their parents and their children. Whether financially or physically, the burden can be emotionally draining for everyone.
Cash Value Life Insurance as a Long-Term Care Insurance Alternative
Most, if not all, traditional long term care policies do not lock in a lifetime premium and are subject to rate increases. Furthermore, if you never need long-term care benefits you will lose all the money you pay into a traditional long-term care policy. However, with a cash value permanent life insurance policy (whole life or universal life) that includes a long-term care rider, you get the following benefits:
- A locked-in rate
- A growing long-term care benefit pool of money
- Access to tax-free money for supplemental retirement income
- A death benefit to pass on to your beneficiaries if you never need long-term care
While many people wait until they are older to get long-term care insurance, the downside of doing so is a higher premium. Furthermore, that premium is subject to continue to increase as they get older. However, by purchasing a whole life or universal life insurance policy before age 50 can allow you to lock-in a lower rate that is guaranteed to not increase, and the benefits can be used not only for long-term care, but for other retirement expenses, and ultimately an inheritance for your children or grandchildren.
Call or contact CEG Life Insurance Services to discuss the different long-term care insurance options available to you. Even if you feel long-term care insurance is not right for you now, you can always begin researching the various options available to you and lay out a plan for when a policy should be started.
Insurance Planning Articles
Additional expert advice to help you with your insurance planning
Is This the Worst Financial Advice Ever? – Entrepreneur
Why following the common advice to buy term life insurance instead of cash value permanent life insurance may ultimately be a bad long-term financial decision.
