Failing to plan for long-term care, i.e., what type one might need, how long one may need it, and how will it be paid for. Is this a big financial mistake? Maybe.
The Department of Health and Human Services in 2016 estimated about half (52%) of people who reach the age of 65 will require some type of long-term care.
From Genworth Financial, the median monthly cost of care nationwide in 2020 is:
- Home Health Aid (assuming 44 hours per week) $4,576
- Assisted- Living facility (private, one bedroom) $4,300
- Nursing Home semi-private room $7,756
- Nursing Home, private room $8,821
As you can see, the money can add up pretty quick. So, one may choose to deny the probability, ignore and wait for a time when it may be too late. Or, one may have some curiosity for a possible solution to mitigate this potential risk.
The former choice suggests using social security retirement monies and spending down assets one worked all their life to create. The latter leads to questions about long term care insurance. Today long-term care insurance comes in many shapes and sizes and can be complicated. I would suggest that is not a reason to ignore.
Two great resources are:
- The National Association of Insurance Commissioners offers “A Shopper’s Guide to Long Term Care Insurance”. It is a 76-page booklet (I said it was complicated) and can be found on their website by clicking here.
- Consult with an independent agent, one who represents multiple carriers and the wide choice of products, i.e., traditional Long-Term Care insurance, hybrid policies that combine long-term care protection with life insurance or annuities.
The advisors here at my firm, Virtus Wealth Management, are one of those independent licensed agents. I know that is a bit self-serving, but I have personally helped many clients navigate these waters using any and all of the products suggested.
Lastly, I will share that my wife Linda and I do have long term care insurance. Also, may I suggest, as I do, look at all options with the idea of why you might reject them, and, if you can’t find a reason to reject, then maybe you need to take some action.
If you would like to know more information about long-term care insurance feel fee to call me at 817-717-3812, I am happy to help you navigate your various options.