Your Health & Your Wealth
Long Term Care Strategy
Your Health & Your Wealth / Long Term Care Strategy
There’s a 70% chance, once you turn 65, that you will need some form of long-term care. We need to setup a plan to protect against that. Let’s protect your family and your nest egg.
Your Health & Your Wealth / Long Term Care Strategy
- $87,600 per year for private room in 2014
- In 10 yrs with inflation = $123,568 per year
- In 20 yrs with inflation = $174,305 per year
- (at 3.5% medical inflation rate)
- Will your income keep up? (In retirement?)
Understanding the Difference: Asset-Based Long-Term Care vs. Traditional Long-Term Care Insurance
One day you or your spouse may need long-term care (LTC) services. In fact, 70 percent of all adults 65 and older will at some point. Will you have the financial resources to stay in your home? It’s wise to plan ahead for the expense of home health care, assisted living and nursing home care.
Asset-based Care: Flexible Products That Can Help You Protect Yourself
There are Care Solutions to help you prepare for your future and protect your retirement:
- Premiums to fit your budget. You can pay all at once, over 10 years, over 20 years or over your lifetime to suit your budget.
- Income-tax free benefits to help pay for home health care, nursing home stays and more, with flexible benefit periods, including lifetime LTC benefits
- Single and joint life coverage to cost-effectively cover two people (you and your spouse or partner).
- A guaranteed death benefit for your loved ones if LTC is never needed
- Guaranteed cash value growth, which can be returned to you if you choose
- Plans can be set up as life insurance or also as an annuity with LTC benefits
Traditional LTC Plans
Long-term care insurance is a contract designed to pay for care when necessary due to the mental or physical loss of one’s ability to function independently whether it is due to an injury or illness, or through the natural progression of growing old and becoming frail.
This kind of insurance policy may cover non-medical needs of daily activites, such as bathing, dressing, using the bathroom, and eating.
When considering the purchase of a long-term care policy, you must address four basic coverage issues:
- How long should benefits be paid? (The length of the benefit period)
- When should the benefit start? (The length of the waiting period)
- How much should be paid? (The maximum benefit amount)
- Should the policy cover facility care only or include care for home and community care
services?
Rising costs mean that long-term care is likely to be more expensive in the future than it is today. This could seriously drain a person’s resources if LTC benefits are not available. Even when LTC benefits are available, a person has to consider whether benefit levels are adequate, and whether benefits will be adequate if they are needed 10 years or 20 years or more in the future.
The biggest shortcoming with traditional plans is the rising costs of coverage, typically without rate guarantees. In addition, coverage limits can potentially exceed the need for coverage, and the “use-it-or-lose it” aspect of most policies can be costly.
Note: In recent years, the number of insurers offering traditional LTC policies has diminished to a very few carriers. Recently, one of the major carriers has limited offering new policies to those UNDER AGE 65 ONLY, partially due to increased risk from the Covid-19 Pandemic. It is likely that future coverage options will require higher premiums and provide less coverage. Asset-based options are the growing trend.
What About Using Medicare for Long-term Care – Is That Viable?
What Medicare Pays For Ltc Expenses
Benefit | Medicare Pays | You Pay |
|---|---|---|
First 20 Days Next 80 Days Beyond 100 Days | Approved Costs Any Costs Over $157.50/day Nothing | Nothing $157.50/day Everything |
Medicare only pays for LTC expenses under these conditions:
- Hospitalization: 3 consecutive days (plus the day of discharge)
- Enter Medicare Approved facility within 30 days of discharge from the hospital
- Physician ordered Skilled Care, no custodial care
- Skilled nursing facility only
- Care must be restorative in nature (the patient must be improving. Once the patient is considered “stable” Medicare stops paying)
The Most-Affordable Option: Life With Living Benefits
A recent trend in Life Insurance is to add one-or more Living Benefits to enhance the value of the Life insurance while you’re alive! Living Benefits can provide benefits can pay a portion of the death benefit should a qualifying terminal, chronic or critical illness or critical injury occur, which can provide great peace of mind to the person in need. Living Benefits are available for both Permanent and Term Life policies (as always, restrictions may apply). Living Benefits are a useful enhancement to your ordinary Life Insurance policy, and can provide useful additional benefits in place of or in addition to a dedicated Long-term Care solution.
Life with Living Benefits may lack key benefit features for extended-care needs but they are infinitely better than not having any such benefits, and they are a great choice for starting out.
Asset-based Care Solutions Provide the Best Value and Affordable Peace of Mind. Find out more (see below) – or call us at 818-515-9870
To find out more, schedule. A no-cost consultation.
