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Long-Term Care Planning: Do You Need Long-Term Care Insurance?

November 8th, 2020 | Written by

Long-Term Care Planning: Do You Need Long-Term Care Insurance?A tough conversation to discuss with clients is the need for long-term care insurance. No one wants to think about not being able to take care of a loved one, let alone themselves. You work your entire life to have a comfortable retirement; wouldn’t you want to protect your assets if you were to need care?

What if I told you that:

  • Someone turning age 65 today has almost a 70% chance of needing long-term care services[i]
  • Women tend to need care longer (3.7 years) than men (2.2 years)i

Some people believe that Medicare pays for long-term care; however, that is not the case. If you meet the following conditions, Medicare will pay 100% of your costs only for the first 20 days.

  • You had a recent hospital stay for at least three days
  • You are admitted to a Medicare-certified nursing facility within 30 days of your prior hospital stay (not all facilities are Medicare-certified)
  • You need skilled care, such as physical therapy or skilled nursing services[ii]

After 20 days, up until day 100, you pay your expenses up to $170.50 per day. That is up to $13,640 for 80 days of care. After 100 days, you are fully responsible for the cost of care if you remain in a skilled nursing facility.

What are my long-term care insurance options?

While the statistics above are compelling, there are still those that don’t see the point in paying for long-term care insurance because it will be a waste of money if they never need it.

With traditional policies, you pay an annual premium, which isn’t locked in and will most likely increase as health care costs increase. Traditional long-term care policies are customizable. You may elect from a variety of benefit periods, elimination periods, and inflation protection options. Many long-term care policies offer an optional benefit known as “shared care,” which allows couples to share their benefit. If you don’t need long-term care and you pass away, the policy goes away.

There are also asset-based long-term care policies (also called linked benefit LTC), which are becoming increasingly popular. These are life insurance policies that offer tax-free long-term care benefits in addition to, or in place of, a death benefit. Asset-based policies can be funded with a lump-sum payment or paid over a period of years. The advantage of this type of policy is that if you never need long-term care, your beneficiaries will get the death benefit, and the money you put into it won’t be “wasted.”

Having a plan in place

Regardless of your decision to get long-term insurance, you should still be proactive by educating yourself early about potential care options and funding sources. Discuss this further with your loved ones to make it easier to put a solid plan in place.

Genworth has a great site that breaks down the average cost of care in your area by the type of care you receive: See Genworth’s Cost of Care Survey here!

Join us at our Long-Term Care Planning Webinar!

Join us on November 18th at 11 am for a webinar, The Power of Longevity Planning, to learn more about long-term care and how you can prepare yourself and protect your assets.

Register for our Long-Term Care Planning Webinar Here

As always, we’re here to discuss your long-term care insurance options and help guide you through a successful retirement.




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    This information is not intended to be used as the only bases for investment decisions, nor should it be constructed as advice designed to meet your particular needs. You are advised to seek the advice of your financial advisor prior to making any decision based on any specific information contained herein.
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