Understanding Long-Term Care Insurance
Provided By Jamie Giddings, First Command Financial Services
For many of us, financial planning is synonymous with retirement planning. We plan with the intent to enjoy a comfortable retirement lifestyle, and we dream of the day when we’ll have the time and freedom to pursue long-awaited interests. Many of us, too, make estate planning a part of our retirement plan, thoughtfully considering the financial legacy we’ll leave to our families. But often, even those who carefully plan for tomorrow fail to consider their potential healthcare needs – specifically, the need for long-term care – and the potential impact long-term care expenses can have on their financial well-being.
THE NEED FOR LONG-TERM CARE
According to the U.S. Department of Health and Human Services, about 60 percent of individuals over the age of 65 will need long-term care services during their lifetime.
Long-term care insurance can help pay for services needed because of chronic illness, physical disability or cognitive (mental) impairment, including skilled care such as nursing, or non-skilled personal or custodial care including services to support activities of daily living such as bathing, dressing and eating.
Compared to the obscenely high costs of long-term care in today’s healthcare market, long-term care insurance is merely a drop in the bucket. And with healthcare costs rising faster than inflation, (Fidelity Investments estimates a 7-percent annual increase) future costs are likely to be significantly higher. For instance, home health aide visits typically are three times a week for four hours each and cost $25 per hour or $15,000 per year. And a one-bedroom unit in an assisted living facility, at $2,691 per month, costs over $32,000 per year. Can you afford that out of pocket?
THE COST OF LONG-TERM CARE
Unfortunately, many people underestimate the cost of long-term care and how it can deplete the assets they’ve accumulated over a lifetime. Many people are surprised to learn that most employer-sponsored and private health plans, as well as Medicare and Medigap insurance, don’t cover long-term care. Medicare pays for long-term care only if you need skilled services or recuperative care for a short period of time – it does not pay for non-skilled assistance with the activities of daily living that comprise most long-term care services.
State Medicaid programs cover some long-term care services only for people who have a low or no income and few financial resources. Federal programs such as the Older Americans Act and Veterans Affairs pay for some long-term care services, but only for specific groups of people and in specific circumstances.
HOW PLANNING TODAY CAN HELP
As part of a financial plan, long-term care insurance can help you maintain your independence and financial security. It can enable you to:
- Preserve your freedom to choose the quality of care you expect.
- Receive care in the place you choose: your home, a daycare center, assisted living facility, nursing home or hospice.
- Reduce your dependence on family members and friends for help.
- Protect your assets to provide for your spouse or family and leave a legacy for your children.
Your future on your terms: It’s what you’ve always dreamed of. By planning for your long-term healthcare needs today, you can look forward to a more independent tomorrow.
For your questions on long-term care or to get more information, contact Jamie directly!
Jamie Giddings, Financial Advisor
1st Command Financial Services
Phone: (719) 465-5555