As people are living longer than ever, the question arises not only of how to pay for longer retirements, but how to ensure that you have enough money or insurance to cover long-term care costs that could become necessary many years in the future and last many more.
Furthermore, the need to balance long-term care considerations with your overall retirement goals is just one more variable in an already complex formula.
According to the US Department of Health and Human Services:
- Someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years
- Women need care longer (3.7 years) than men (2.2 years)
- One-third of today’s 65 year-olds may never need long-term care support, but 20 percent will need it for longer than 5 years
Many clients ask “How much will Long Term Care services cost us during our lifetimes?” As you can imagine the answer depends on several factors, including
1) Where you reside when you need care
2) How much care you need and
3) What type of care we need (and or want).
Genworth has been doing a national cost of care survey for 12 consecutive years to help people make informed decisions regarding their care and plan appropriately.
In Pennsylvania the state median on care costs breaks down as follows:
Assisted Living Facility = $42,660 per year
Home Health Care = $46,790
Nursing Home Care (Semi-private room) = $105,485
Click HERE to see what care costs are for 2015 and select your state and neighborhood for detailed numbers.
Retirement Prosperity Group is expert at evaluating your needs and helping you achieve that balance – how to cover vital care costs without depleting your assets and paying for expensive insurance.
What’s are some of the problems with traditional Long Term Care insurance? Our clients tell us they don’t like: A) The fact that premiums could increase B) They waited too long before purchasing it and now the costs are prohibitive C) The client cannot pass underwriting D) If you pay premiums for 15 or 20 years and you pass away peacefully in your sleep you lose the benefits altogether.
With longer life expectancies today Life Insurance and Long Term Care companies have gotten competitive on the various solutions they are making available.
Here are 2 of the most popular options (with our clients) available today:
1) Life Insurance that has Long Term Care protection. Client A purchases a $250,000 Universal Life Insurance policy. This policy doubles as a Long Term Care bucket, so if Client A needs LTC services she can access that money. However, if she passes away not needing the care her beneficiary receives that benefit as a Life Insurance benefit tax-free.
2) An option for a client who may not qualify for Life Insurance is a sort of hybrid annuity that is built for long-term care protection. You pay in a lump sum and this annuity would provide up to double or triple the benefits (depending on a simplified underwriting process). And should you not need the Long Term Care protection the original premium (plus interest) would pass on to your beneficiaries.
The options chosen for each client would be very specific to that clients needs and suitability factors that I cannot cover on a broad forum like this each solution so I chose the 2 most popular. But long term care solutions would be reviewed as part of an overall Retirement Prosperity Roadmap that we do for our clients. We do not charge a fee for these services.