Long Term Care - How Will You Pay For It?

Below I put together some very brief, but important information to know about regarding Long Term Care:

  • Medicare does NOT cover Long Term Care! 
    (Many people incorrectly think or assume that Medicare will cover their Long Term Care needs. However Medicare does NOT cover Long Term Care. The Affordable Care Act does NOT cover Long Term Care either. While state Medicaid programs do cover long-term care, these benefits are available only to those with very low income.)

  • 70% of people age 65 and over will need long-term care during their lifetime!

  • Women, because of their longer life spans, are 50% more likely than men to enter a nursing home at some point after age 65.

  • One big myth about Long Term Care is that it affects senior citizens only. However the need for Long Term Care can happen at any age. Nearly 40% of people using Long Term Care services are under the age of 65! Strokes, diabetes, car accidents, ladder falls, and other chronic conditions are just some of the major causes that require Long Term Care among younger populations.

  • Long Term Care is expensive, especially without planning ahead with some sort of Long Term Care coverage! (When difficult decisions have to be made about healthcare, family members may also not be fully apprised of what someone’s wishes are under those circumstances. Addressing all of these issues ahead of time not only provides financial protection, it can also eliminate unnecessary emotional burdens.)

  • There are several options you may want to consider when it comes to funding Long Term Care future expenses:
    • Self-Insuring (Drawing down from your own assets to pay for long term health care costs as they arise.) As well as relying on family members to assist with your long term care needs, which can put a large burden on your family. This method is not advised unless you have substantial assets to draw from and/or family members that are willing to commit to pitching in long hours over possibly years to assist.
    • Another option is to purchase traditional Long Term Care Insurance well in advance when you are young and healthy enough to still qualify to get approved. (Note: Traditional Long Term Care insurance usually provides comprehensive coverage, but it comes with annual premiums which are not guaranteed. So an increase in future premiums later on may cause you to make a difficult choice to pay more than you originally planned or you will have to reduce coverage at a time when you may need it the most. Keep in mind that if end up never needing to use the Long Term Care coverage, you won’t get your money back with traditional Long Term Care Insurance.
    • A different method of Long Term Care coverage is with the use of hybrid types of policies. Life insurance policies can offer long term care benefit riders. Also fixed annuities set up to pay out a multiple of your premiums if needed to reimburse long term care expenses. These hybrid long term care solutions pay an income tax free death benefit to your beneficiaries if you don’t use all your benefits, and some type policies even offer a money-back guarantee via a return of premium feature.

  • An important thing to remember is don’t wait until it’s too late! Long Term Care planning is very much like retirement planning in the fact that the sooner you begin, the more options and flexibility you will have!

Conclusion: Purchase your long term care insurance policy when you are young and healthy to receive the lowest prices. If you missed the opportunity to purchase long term care insurance while you were younger and at your peak health, purchase your long term care insurance policy as soon as possible to avoid even higher rates and also avoid not being able to get approved due to deteriorating health issues.

Contact me at (941) 404-5334 to discuss your long term care options and/or get you started on the right track of getting yourself insured.

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