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PLANNING YOUR FUTURE

My Life's Protection
Page 3


The biggest threat to your retirement savings is having to pay for long-term care for you or your spouse.

One in two people will develop a chronic physical or mental illness and require round-the-clock medical assistance – long-term care. Most medical insurance policies carry exclusions and limitations on long-term care – as does Medicare, which currently pays for just 5 percent of the cost of elderly care in the U.S.

Long-term care insurance pays for:

• Skilled (daily nursing and rehabilitative), intermediate (occasional) and custodial (doctor-ordered assistance for daily living activities) care in state-licensed nursing homes;
  
• Home care services such as skilled/non-skilled nursing care, homemakers, home health aides;
  
• Assisted living, adult day care, respite care and other community care;
  
• Coverage of Alzheimer's disease and other "organic cognitive disabilities"

How much does it cost? It depends on…

1. Age: Similar to life insurance, the younger you are when you purchase the policy, the lower the annual premium will be.
2. Benefits: Not just dollars but how long you wish the benefit to be paid. A policy with a higher benefit and a shorter time period will cost more than a policy with a lower benefit and a shorter time period.
3. Elimination or deductible period: The longer this is, the less premium you'll have to pay.
4. Inflation feature: For a cost, you can add this to adjust for inflation.

What does long-term care cost? The average hourly rate for Home Health Aides (HHAs) provided by a home care agency is $18 per hour.**

The average daily rate for a private room in a nursing home is $192, or $70,080 annually. **

The average daily rate for a semi-private room in a nursing home is $169, or $61,685 annually. **

The national average annual cost of home health care is well over $20,000 and is expected to climb to $68,000 by 2030.***

The cost of long-term care insurance is nothing compared to the cost of long-term care.

Private long-term care insurance also gives you a choice about your care, especially regarding where it is given. Being able to pay for home services with insurance payments may allow you to stay at home. And for those of you doing "double duty" and being concerned about a parent, long-term care insurance also pays for housekeeping and health aides, services that might otherwise have to be performed by friends and family.

 

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