Long-Term Care – Why You Need to be Prepared

Long-Term Care – Why You Need to be Prepared

It is an undeniable fact – we are living longer. By the year 2050, people in their 90s will increase four fold. That means the number of senior citizens (i.e. age 65+) will more than double, according to an article by J. Brendan Ryan. Many seniors need long-term care. In fact, over ninety percent of seniors’ health care costs today are attributable to chronic diseases like arthritis, diabetes, etc.

The likelihood of a senior citizen needing long-term care at some point in their lives is extremely high – nearly 70 percent.

Millions of unpaid caregivers helps the sick, elderly and disabled. This includes significant others, family members, etc. who are helping out a loved one during this phase of their life.  A study in MetLife estimated that the monetary loss for these unpaid caregiver exceeds $500,000.

In many cases, the needs for the disabled or infirm simply become too demanding necessitating professional care in a nursing facility.  How can you prepare for the potential need of long-term care?

Long-Term Care Insurance

You can get a long-term care insurance policy. Most long-term care policies provide benefits for paid home-health care or care in a nursing home.  However, the risk for some of these policies is that you pay for this insurance and may never actually need long-term care.

Another insurance-based option is a life-insurance policy with a long-term care benefit included in the policy. This policy may be preferred since the benefits are guaranteed to be accessed – either by you using the long-term care coverage or when you pass on and the life insurance is disbursed.

How About an Annuity?

Another option is pursuing an annuity with a long-term care benefit built in. The covered benefits can be the same as for a long-term care insurance policy, but if you don’t actually need the coverage, the cash value of the annuity can be used for retirement income or bequested to a beneficiary in your Will.

There are tons of different insurance and annuity products offering different long term care options. It is important to carefully review your policy options and seek a review from a trusted advisor.

What About the Government?

In addition, there is government assistance available through programs like Medicaid. These can be extremely complicated and hard to qualify for. It is important to have a plan in place ahead of time to preserve as many assets as possible for you and your loved ones while getting the assistance you need. Many of these programs require planning ahead of time to avoid a spend down of all your assets to qualify.

Take the time to sit down and speak with an experienced estate and long-term care planning attorney to discuss which option makes the most sense for you.