About Long Term Care Insurance (LTCI)
Many people mistakenly believe that Medicare or their health insurance plan will pay for any long-term care services they may need. However, health insurance only pays for services such as doctor visits, surgeries and hosptial bills. If you develop a chronic illness or become disabled due to an accident or injury, medical insurance will be essential. If you are unable to care for yourself for an extended period of time, you’ll need long-term care services. These services are quite expensive. Full-time nursing home care averages more than $60,000 annually and part-time, in-home care can cost more than $25,000 per year (some regions of the country can be much higher).
Because the cost of long-term care is so high, it is possible to deplete a significant portion of your life savings should you need the care. The probability of needing this type of care is higher than most people think. There’s about a 50 percent chance you’ll need some type of long-term care after age 65.
Long-term care services are not just for older people. In fact, 40 percent of patients receiving long-term care are under age 65. Like most types of personal insurance, the younger you are when buying the coverage, the lower the cost.
While long-term care insurance is right for many people, it doesn’t make sense for everyone. If you can afford to pay for care without significantly impacting your savings, you may not need LTCI. Conversely, if your assets, not including your home, are less than $100,000 if you’re married (or $60,000 if you’re single), you may not be able to afford the premiums. A good rule of thumb is to spend no more than 6 percent of your gross income on LTCI premiums.
To learn more about long term care insurance, please contact us.
