Long-Term Care: What It Is and Do You Need It

Once in a while, we have to “eat our vegetables” and talk about insurances.  In this episode, Corey and Rachelle tackle long-term care insurance in recognition of long-term care insurance awareness month.  Insurance conversations almost always revolve around things we would rather not think about, and this is no different.  But most of us will have to deal with aging, and a lot of us will have to deal with the increased costs that can come along with that.  Ignoring it won’t help!

So, what is long-term care?

• Medical and non-medical assistance to help a person unable to perform some or all activities of daily living. This could be at home or in a facility.
• It can be VERY expensive.
  • Can live for a long time after needing care.
  • A private nursing room costs an average of almost $8,000 per month.
• Seventy percent of people aged 65 or older, will need long-term care during their lifetime.

How does insurance for long-term care work?

• Usually, cannot get unless you are fairly healthy.
• Generally, set up with a maximum monthly benefit and/or lifetime coverage amount.
• Sometimes includes inflation protection, but not always.
• Can be an add-on feature to life insurance, can be a shared policy with a partner or an individual policy.
• Cost can potentially change after time, even after you have a policy.

Should you get long-term care insurance?

• Age is one consideration. Most policies only offered to those who are 40 or older.  If you get too early, you may pay a lot for the policy over time.
• Wealth is another.
  • For those who have saved a great deal and expect to have more money than they need to retire, you likely don’t need coverage, but may want it to protect that wealth for your heirs.
  • If you have very little resources in retirement, you may qualify for need-based-aid (Medicaid), but you basically have to be destitute to qualify.
  • For those that are in between, you may need some support to be able to afford long-term care without completely depleting your resources.

This is a complex topic and a complicated insurance product.  Do lots of research when looking into this, and as always, let us know if any questions come up.  You can always email us at podcast@thefinitygroup.com.

For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance