What Is Long-Term Care?
Long-Term Care is simply the personal assistance you may need to maintain your quality of life1. It is estimated that 7 out of 10 people over the age of 65 will need long term care at some point in their lives.
Long-Term Care can consist of stays at an assisted living center, nursing home, rehabilitation center, or even at home health care either part-time or full time by family members or health care professionals.
Some Long-Term Care Facts:
The Cost of Long-Term Care:
Full time residency in a Long-Term Care facility or nursing home can cost on average between $4,000 and $7,000 per month or even more. While Medicaid pays for about half of all U.S. nursing home claims in the U.S. annually, you have to be near destitute (with assets of $2,000 or less) to collect.
If you want to set aside funds to cover Long-Term Care costs for say 4 years, you will need $66,000 per year (based on $5,500 per month) with an approximate 5% per year cost increase which equals about $284,500 per spouse for the full 4 years. Now, that's a lot to set aside.
If you choose to fund the cost of 4 years of Long-Term Care with money set aside, but you don't want to spend down your principal, you will need to set aside $1,189,600 per spouse assuming the same 5% per year cost increase and a 6% return on your money.
The 3rd way to fund Long-Term Care, of course, is with Long-Term Care Insurance.
There are basically 3 types of Long-Term Care Policies:
A Special Note: Some Long Term Care Policies or riders may even pay your spouse for at home care.
In summary, Long-Term Care, while not part of my New Asset Allocation Model, because it can be such a large expense later in life, it does need to be part of Retirement Planning.
Some Insurance companies I offer my clients with various forms of Long-Term Care coverage include:
I am licensed to provide Long-Term Care for residents of the state of Texas.
1 Long Term Care insurance products and services are not insured by the FDIC (Federal Insurance Deposit Corporation) or any government agency, and are not a deposit of a bank, and are not a condition to any banking service or activity. Long Term Care Insurance is a contract between you and a Life Insurance company. Policies are subject to underwriting, and a medical exam may be required to determine eligibility.