Long-Term Care Insurance

November is Long-Term Care Awareness month. It’s a great time to review your plans for the possibility that one day you will need assistance due to injury, disease or aging. A Morningstar article sited that presently 6.3 million Americans have a long-term care need and 52.3% of people turning age 65 will require some help in their lifetime. Long-term care expenditures have risen from $30 billion in 1980 to $225 billion in 2015. Not only is this expensive, but it’s also a tremendous burden on the family and friends who may have to take care of you. This task often falls on the women in a family.

Of all the help provided to older adults, 83% is delivered by friends or family members.

  • Unpaid caregivers provided 37 billion hours of long-term care in 2013: worth $470 billion.
  • Lost wages amount to $3 trillion.
  • More than 75% of caregivers are women.
  • The average age of a caregiver of people who are over 65 is 63.
  • 70% of caregivers suffered work-related difficulties due to their caregiving duties.

Genworth just released its 2017 Cost of Care Survey conducted by CareScout®. In the Chicago area, the monthly cost of Adult Day Health Care is $1562. An assisted living facility is $4695 per month, and a semi-private room in a nursing home is $7239.

The insurance industry has struggled with providing solutions for this crisis. Many providers of traditional long-term care insurance have either left the business or imposed steep premium increases. The number of insurers offering standalone long-term care policies has dropped from 125 in 2000 to less than 15 in 2014.

Is insurance worth it? Should I try to go it alone? When is the right time to buy? Every situation is different and hinges on how much you have saved, age, family health history, desire to leave an inheritance, etc.

In addition to traditional standalone long-term care insurance, other options –often called hybrid products – allow you to add long-term care riders to life insurance and annuity products. The number of hybrid/long-term care policies sold to individuals jumped from 72,736 in 2009 to 305,068 in 2013. Each has their benefits and drawbacks. The guidance of a competent, trusted financial advisor is crucial.

Please let me know if you have any questions or if you would like to discuss your situation.

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