For many people, insurance seems like a bet against yourself. However, if you’re approaching age 65, it may be a bigger gamble to go without long-term care insurance. According to the U.S. Department of Health and Human Services, 70% of Americans age 65 or older can expect to need some form of long-term care in their lifetime. Additionally, 20% of 65-year-olds will need long-term care for longer than five years.
THE COSTS OF LONG-TERM CARE
So, if you’re without long-term care insurance, how much will you need for long-term care? On average, it costs $240 per day or $7,200 per month for a private room in a nursing home. For women, who require long-term care for an average of 3.7 years (or around 44 months), that adds up to $316,800. For men, who require long-term care for an average of 2.2 years (or around 26 months), that adds up to $187,200. And for patients with Alzheimer’s, that cost could easily double.
While health and auto insurance are mandatory, and most homeowners wouldn’t go without home insurance, long-term care insurance is still optional and assumed to be too expensive of an investment. However, if you look at it from a risk-reward standpoint, it should be the most desired insurance for Americans between the ages of 50 and 70-years-old.
OPTIONS TAILORED TO YOUR UNIQUE SITUATION
Over the past 20 years that long-term care insurance has been offered, the cost was the biggest hurdle for most people. Today, there are more options and affordable choices that are designed to fit almost any budget.
Let’s consider a hypothetical situation: the Thomases and the Smiths, two couples in their mid-50s and in good health. The Thomases are affluent with a large amount of liquid investments and their biggest concern is passing on their assets to their heirs. I recommended them a universal life insurance policy with a long-term care rider to provide them protection against an early death and a long-term care financial burden. By spending $100,000 on the policy, they received a $250,000 death benefit and a $400,000 long-term care benefit.
The Smiths are in a much different situation. Mrs. Smith’s father needed skilled nursing care in a long-term facility and, as they didn’t have insurance, they were overwhelmed by the financial burden. Worried about facing the same situation, the Smiths knew their savings couldn’t cover long-term care costs. We worked together to find a traditional long-term care insurance policy with a reasonable annual premium that fit within their budget and would cover most of the costs of a long-term care facility.
DO YOU NEED LONG-TERM CARE INSURANCE?
Whether you’re worried about potential health concerns or want to protect your hard-earned wealth, it’s important to understand the long-term care insurance options available to you and whether or not a policy makes sense for your lifestyle and needs. While some policies can be expensive, requiring long-term care without insurance in place can be devastating.
If you have questions about long-term care insurance and the options available to you, call our office at 530-273-4425 for a complimentary consultation. We can evaluate your needs and make recommendations that align with your budget and financial goals.
ABOUT RICK FISHER
Rick Fisher is a financial consultant offering comprehensive financial planning and investment management with Ostrofe Financial Consultants, Inc. in Grass Valley, California. His goal is to help clients prepare for retirement and pursue their financial dreams in a fun and personal way. Rick serves clients in 4 states, though most reside in California, including the greater Sacramento, Los Angeles and San Diego areas.
CREDENTIALS AND EXPERIENCE
Rick holds FINRA Series 7, 63, 65, 24, and 51 licenses and is supported by Ostrofe Financial Consultants and National Planning Corporation. He also holds his California Insurance License and the designation of CERTIFIED FINANCIAL PLANNER™ professional (CFP®). The CFP® designation is awarded to experienced financial professionals who pass an examination and pledge to abide by a strict code of ethics. He holds himself to their high standards of integrity, objectivity, professionalism and confidentiality. Please note: NPC does not render tax or legal advice.
HOW RICK CAN HELP
Rick strives to take the fear and stress out of financial planning. He works with clients to uncover financial issues they may not have known about or have not yet addressed. Rick and the Ostrofe Financial Consultants team are there to answer questions, guide clients towards their goals, and help them feel confident in their future. To learn more about how Rick may be able to help, call his office at 530-273-4425.
The information provided is not intended to provide specific advice and should not be construed as a recommendation for any individual. To determine which investment may be appropriate for you, consult with your financial, tax, or legal professional. Securities and investment advisory services offered through NATIONAL PLANNING CORP. Member FINRA/SIPC. Ostrofe Financial Consultants, Inc. and NPC are separate and unrelated companies.