It’s a pressing question for anyone who is retired or who is approaching retirement: Will you need long-term care (LTC) and, if so, how will you pay for it?
Unfortunately, long-term care is a reality for many seniors. Part of that is due to increasing life expectancies. Retirees are living longer and as they do, they’re becoming more vulnerable to a wide range of illnesses and injuries.
One way to pay for long-term care is with long-term care insurance (LTCI). These are insurance policies you can purchase and pay for today, and then use to cover some or all of your long-term care expenses in the future. LTCI can be an effective way to protect your assets and ensure you get the level of care and treatment you want.
And yet, even as effective as long-term care insurance is, many retirees still don’t have it. They may think it’s too expensive, they won’t need long-term care or they’ll have other ways to cover the expenses.
Have you resisted purchasing LTC insurance? Check out the myths below that may be contributing to your thinking. If any of these sound familiar, it may be time to reassess your position on LTC insurance.
I won’t need long-term care.
You may be under the assumption you won’t need long-term care. According to the U.S Department of Health and Human Services, that assumption is likely wrong. Their research shows nearly 70 percent of 65 year olds will need long-term care at some point. Men will, on average, require long-term care for 2.2 years, while women will require it for 3.7 years.1
Consider the fact any number of conditions could cause a need for long-term care. Arthritis may limit your ability to perform basic functions, like getting dressed or cooking. Joint issues could restrict your mobility. A cognitive disorder, like Alzheimer’s, could substantially impact your life. Just because you’re healthy today doesn’t mean you won’t have a need for long-term care in the future.
Medicare will pay for it.
Many retirees believe Medicare will cover all of their medical expenses. That’s usually not the case, especially when it comes to long-term care. Medicare will provide some temporary coverage for long-term care if the care is related to a recent hospitalization.
Even when Medicare does provide coverage, the coverage is usually limited. For example, in many cases, Medicare will only fully cover the first 20 days. They will then partially cover the next 80 days. After day 100, you’re on your own.2
I have to move into a nursing home to use the insurance.
There may have been a time when this was true, but that day has passed. Most policies today include everything from nursing facilities to assisted living to in-home care. Some even cover home modifications, such as the installation of a wheelchair ramp or grab bars.
In fact, your long-term care insurance may be what keeps you out of the nursing home. If you can use your insurance to hire in-home help and modify your house, you may be able to stay in your home longer and avoid a move to assisted living.
Curious about whether long-term care is right for you? Contact us here at Lighthouse Financial & Tax. We welcome the opportunity to analyze your needs and help you choose the best strategy.
1 http://longtermcare.gov/the-basics/how-much-care-will-you-need/
2 https://www.medicare.gov/coverage/skilled-nursing-facility-care.html
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15640 – 2016/4/29
