Long-Term Care Insurance

Long-term care

Protection for your retirement savings — and your family

The greatest threat to your retirement savings is the ever-rising cost of long-term care.

Long-term care refers to a wide array of care, personal assistance and social support services for people who are physically or mentally unable to independently care for themselves for an extended period of time. Whether you should consider purchasing Long-Term Care Insurance (LTCi) depends on your age, health status, overall retirement goals, income and assets.

A Long-Term Care Insurance policy may assist in paying for any or all of the following types of services:

  • Nursing homes
  • Assisted living communities
  • Adult day care centers
  • Home health care
  • Personal assistance with the activities of daily living.

Most policies pay a daily or monthly maximum benefit which you choose at the time of purchase. Coverage will pay for the period of time that you also choose at the time of purchase.

According to the Health Insurance Association of America, the average age at which people purchase long-term care insurance is 62. However, purchasing a policy at a younger age typically means policies’ premiums are much more affordable. While you may pay for a longer period of time, taking out a policy around age 50 allows you to enjoy the peace of mind in knowing that you are covered.

How does Long-Term Care Insurance differ from Disability Insurance?

Unlike a medical health insurance policy that will cover a limited number of days of recuperative time, a Long-Term Care Insurance plicy is for health issues that require care for two years or more (Long-Term). Disability Insurance ensures your income will continue at a certain level for the time you are unable to work due to injury or illness, but it does not pay for the care you may need. The policyholder will then have to pay out of pocket for any ongoing long-term care due to accident or injury.

What is the cost of long-term care?

In 2016, the average private-pay cost of care per year in a nursing home was $92,345 for a private room and $82,125 for a shared room. Assisted living rates also averaged $43,435 per year. Rates vary, depending on region, size of the accommodations, services available, quality of care and amenities.

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