ST. CROIX INSIGHTS
Long-Term Care: The Plan You Can’t Afford to Ignore
There are many life circumstances we don’t like to talk about. Growing old and needing long-term care is one of them. A new survey from OneAmerica revealed that 74% of Americans think they are likely to need long-term care (LTC) in the future, and nearly two-thirds (64%) say LTC planning is a priority. However, only 33% are confident in their current long-term care plans. How about you?
I know first hand about this topic. Not only do I personally have long-term care insurance but so did my mom. When my mom needed ongoing care, I’m grateful we had LTC for her; no way was my mom going into a nursing home if I could help it. We were very blessed to keep her at home for her days through a horrible illness. 24-hour care was running $20,000 a month. That’s not a typo. That was only possible by proper planning.
Planning for long-term care can encompass many different things. It may include services designed to meet your health needs—whether mental or physical—or personal care needs when you can no longer perform these everyday activities on your own.
Getting the care you need during your older years can be expensive, which is why LTC planning is important. For example, in Minnesota, the average cost of LTC per year is:
- $60,000 for an average of 44 hours per week of home care in your home.
- About $48,000 in an assisted living facility (this cost does not include services and additional fees).
- Over $90,000 for care in a nursing home.
Who needs long-term care?
Long-term care is needed by individuals who require assistance with daily activities for an extended period due to age, chronic illness, injury, or disability. The six standard activities of daily living (ADLs) are generally recognized as bathing, dressing, toileting, transferring (getting in and out of bed or chair), eating, and continence. Typically, if you are unable to do two of the six ADLs on your own, you need long-term care assistance. Here are the key groups who may need long-term care:
- Elderly individuals: As people age, they may experience declining physical or cognitive abilities, requiring help with basic activities like bathing, dressing, or managing medications.
- People with chronic illnesses: Conditions like Alzheimer’s, Parkinson’s disease, and other degenerative illnesses often require long-term assistance with both physical care and medical monitoring.
- Individuals with disabilities: Those born with disabilities or those who develop disabilities due to injury or illness may need ongoing care to maintain their quality of life.
- People recovering from serious illness or injury: Some may need long-term rehabilitation after a stroke, surgery, or severe injury to regain mobility and independence.
- Individuals with mental health conditions: In some cases, people with serious mental health issues might need long-term care to manage their daily lives.
As you can see, long-term care isn’t reserved for the elderly. It may even include a middle-aged person recovering from an accident. Even if you feel you’re a long way from needing assistance, having a plan can be imperative.
What does it take to plan for long-term care?
Long-term care isn’t cheap and you don’t know how long you will need it. It may be temporary, only a few months, or for the remainder of your life, which could be many years. According to A Place for Mom, the average length of stay in long-term care is 3.2 years.
There are many different avenues to save for long-term care. You can save on your own by funneling money into a high-yield savings account or health savings account (HSA). You can also opt for a long-term-care-specific financial product.
Traditional LTC insurance
This is a standalone policy specifically designed to cover the costs of long-term care services, whether at home, in an assisted living facility, or in a nursing home. Traditional LTC insurance provides coverage if you need help with daily activities like bathing, dressing, or eating. The policy offers flexibility in benefit periods (the length of time it will pay benefits) and daily or monthly benefit limits. However, premiums can increase over time, and if you don’t use the care, no benefits are paid out.
Life insurance with an LTC rider
For those who want dual-purpose coverage, life insurance with a long-term care rider may be a good option. These policies allow you to tap into your policy’s life insurance death benefit to pay for long-term care expenses if needed. If you don’t end up requiring long-term care, your beneficiaries still receive the death benefit. This type of policy tends to have fixed premiums, making it a more predictable expense over time. It’s a way to provide for both long-term care needs and the possibility of leaving something for your loved ones.
Annuity with LTC benefits
An annuity with LTC benefits is an insurance product that provides regular income, with the potential for increased payouts if you need long-term care. It’s a good option for those looking to combine income planning with long-term care protection. These annuities can offer higher payouts during periods of long-term care needs, ensuring you don’t run out of money when you need care the most.
The lack of appropriate long-term care planning has become such an issue that some states, such as Washington, have implemented public LTC programs that require a new tax to create a state-wide LTC fund. It’s a similar concept to Social Security. You’re taxed now, and the funds are available later when you need them. In the meantime, others are accessing the funds when they need them.
Medicaid also helps provide long-term care services for older individuals who meet specific income thresholds. There are strict eligibility requirements to access Medicaid funds and, unfortunately, not all facilities accept Medicaid nor does Medicaid cover all long-term care needs, such as a private room in some states.
If you don’t want to leave your long-term care to chance (or the government), you need your own plan. Reach out today and let’s talk. Together, we can review your financials, goals, and needs to determine what long-term care plan works best for you.
There are many life circumstances we don’t like to talk about. Growing old and needing long-term care is one of them. A new survey from OneAmerica revealed that 74% of Americans think they are likely to need long-term care (LTC) in the future, and nearly two-thirds (64%) say LTC planning is a priority. However, only 33% are confident in their current long-term care plans. How about you?
I know first hand about this topic. Not only do I personally have long-term care insurance but so did my mom. When my mom needed ongoing care, I’m grateful we had LTC for her; no way was my mom going into a nursing home if I could help it. We were very blessed to keep her at home for her days through a horrible illness. 24-hour care was running $20,000 a month. That’s not a typo. That was only possible by proper planning.
Planning for long-term care can encompass many different things. It may include services designed to meet your health needs—whether mental or physical—or personal care needs when you can no longer perform these everyday activities on your own.
Getting the care you need during your older years can be expensive, which is why LTC planning is important. For example, in Minnesota, the average cost of LTC per year is:
- $60,000 for an average of 44 hours per week of home care in your home.
- About $48,000 in an assisted living facility (this cost does not include services and additional fees).
- Over $90,000 for care in a nursing home.
Who needs long-term care?
Long-term care is needed by individuals who require assistance with daily activities for an extended period due to age, chronic illness, injury, or disability. The six standard activities of daily living (ADLs) are generally recognized as bathing, dressing, toileting, transferring (getting in and out of bed or chair), eating, and continence. Typically, if you are unable to do two of the six ADLs on your own, you need long-term care assistance. Here are the key groups who may need long-term care:
- Elderly individuals: As people age, they may experience declining physical or cognitive abilities, requiring help with basic activities like bathing, dressing, or managing medications.
- People with chronic illnesses: Conditions like Alzheimer’s, Parkinson’s disease, and other degenerative illnesses often require long-term assistance with both physical care and medical monitoring.
- Individuals with disabilities: Those born with disabilities or those who develop disabilities due to injury or illness may need ongoing care to maintain their quality of life.
- People recovering from serious illness or injury: Some may need long-term rehabilitation after a stroke, surgery, or severe injury to regain mobility and independence.
- Individuals with mental health conditions: In some cases, people with serious mental health issues might need long-term care to manage their daily lives.
As you can see, long-term care isn’t reserved for the elderly. It may even include a middle-aged person recovering from an accident. Even if you feel you’re a long way from needing assistance, having a plan can be imperative.
What does it take to plan for long-term care?
Long-term care isn’t cheap and you don’t know how long you will need it. It may be temporary, only a few months, or for the remainder of your life, which could be many years. According to A Place for Mom, the average length of stay in long-term care is 3.2 years.
There are many different avenues to save for long-term care. You can save on your own by funneling money into a high-yield savings account or health savings account (HSA). You can also opt for a long-term-care-specific financial product.
Traditional LTC insurance
This is a standalone policy specifically designed to cover the costs of long-term care services, whether at home, in an assisted living facility, or in a nursing home. Traditional LTC insurance provides coverage if you need help with daily activities like bathing, dressing, or eating. The policy offers flexibility in benefit periods (the length of time it will pay benefits) and daily or monthly benefit limits. However, premiums can increase over time, and if you don’t use the care, no benefits are paid out.
Life insurance with an LTC rider
For those who want dual-purpose coverage, life insurance with a long-term care rider may be a good option. These policies allow you to tap into your policy’s life insurance death benefit to pay for long-term care expenses if needed. If you don’t end up requiring long-term care, your beneficiaries still receive the death benefit. This type of policy tends to have fixed premiums, making it a more predictable expense over time. It’s a way to provide for both long-term care needs and the possibility of leaving something for your loved ones.
Annuity with LTC benefits
An annuity with LTC benefits is an insurance product that provides regular income, with the potential for increased payouts if you need long-term care. It’s a good option for those looking to combine income planning with long-term care protection. These annuities can offer higher payouts during periods of long-term care needs, ensuring you don’t run out of money when you need care the most.
The lack of appropriate long-term care planning has become such an issue that some states, such as Washington, have implemented public LTC programs that require a new tax to create a state-wide LTC fund. It’s a similar concept to Social Security. You’re taxed now, and the funds are available later when you need them. In the meantime, others are accessing the funds when they need them.
Medicaid also helps provide long-term care services for older individuals who meet specific income thresholds. There are strict eligibility requirements to access Medicaid funds and, unfortunately, not all facilities accept Medicaid nor does Medicaid cover all long-term care needs, such as a private room in some states.
If you don’t want to leave your long-term care to chance (or the government), you need your own plan. Reach out today and let’s talk. Together, we can review your financials, goals, and needs to determine what long-term care plan works best for you.