November is Long-Term Care Awareness Month and National Family Caregivers Month, and that makes sense since the two are tied together. If you are not aware of long-term care and the issue of family caregivers, it is not surprising as Americans are also in denial that they will ever require long-term care services despite a large number of Americans who are already caregivers for an older parent or family member.
You shouldn't need a month to consider the problems associated with longevity. Yet, November is a great month the highlight the problem since it starts the holiday season.
Every family should have an understanding of how a long-term care event would impact them. The consequences of long-term health care are more than just about money, although the cost of care is very expensive. Often family members must become caregivers, and this caregiving has its own impact on the caregiver and their family.
Perhaps you have read about the statistics. There are so many. The United States Department of Health and Human Services tells us once you reach the age of 65, about half of us will need long-term care services in our lifetime.
Changing health, bodies, and minds lead to a higher risk of needing help with daily living activities or supervision due to dementia.
Care Costs Continue to Grow
The cost of long-term care continues to grow and places a tremendous strain on a budget of most American families. The LTC NEWS Cost of Care Calculator shows the national average of one year of home health care running $57,930 a year - $4,828 a month. However, in 25 years, the cost is expected to be $9,747 a month. Imagine the strain on your cash flow and lifestyle either today or in the decades to come.
The news for assisted living is, as expected, not a pretty picture, with the national average base costs running $4,603 a month today and $9,294 in 2046 (sur-charges based on the amount of help you need get added to the base cost). Skilled nursing home cost is even more with an annual cost of over $115,517 today and $233,214 in 2046.
Increasing demand for long-term health care, demographics, labor shortages, and increased labor costs are reasons we are seeing rising costs.
Family Caregivers Face Stress
Caregiving is not an easy task, and it places a physical, emotional, and financial burden on your family. Typically, a daughter or daughter-in-law becomes the default caregiver.
Family caregivers have to juggle the needs of being a caregiver along with their jobs, spouses, and children. Surveys show the health and well-being of a caregiver are negatively impacted as well.
Face it, being a family caregiver is physically and emotionally demanding.
Have you prepared your family and your finances for the very expensive costs of extended care and the stress it places on those you love? Often people ignore the problem until a family crisis occurs.
One solution many American families are turning to is Long-Term Care Insurance. These affordable policies are paying out huge benefits. In 2020 the major insurance companies paid out over $11.6 Billion in benefits. This money is being used to access quality care in all settings, including care at home.
Women continue to need care more than men, although a husband typically will require care before the wife.
Mark Goldberg, who runs the FPS Insurance Agency in Frisco, Texas, says his clients express the desire to not ever be a burden on their family.
“They have seen the impact on everyone in the family and [what happens to] their finances. They don’t want to be in that position.”Mark Goldberg, who runs the FPS Insurance Agency
With no advance plan, the full responsibility of either caregiving or managing paid care services falls on family members. Even managing paid care takes an emotional toll.
Access to Quality Care – Independence – Peace-of-Mind
Access to quality care and independence is a primary objective of many people who research long-term care planning. In the end, having a plan in place serves multiple objectives.
“The vast majority of my clients tell me its “peace of mind” they desire.”Michelle Perloe, Long-Term Care Insurance specialist
Perloe says that some clients would never have the funds to pay for the costs of quality care, others are looking at protecting their estates, either for their family or even for charities.
There are several types of Long-Term Care Insurance. Traditional insurance plans have been a solution that has been available for decades. You pay an ongoing premium, and when you need care, the insurance company will pay a monthly or daily benefit toward the cost of that care.
Partnership Long-Term Care Insurance
Most states participate in the Partnership Long-Term Care Insurance Program. These insurance policies provide an additional safety net by providing dollar-for-dollar asset protection if you were to ever exhaust all the benefits in your policy. A Partnership Long-Term Care Insurance policy allows you to access the Medicaid program’s long-term care benefit without being poor.
The partnership program is one of the biggest secrets in retirement planning. Author and Long-Term Care Insurance specialist Margie Barrie says very few consumers know about the program, but she talks about it with every client. She says it is a very valuable concept but acknowledges that many agents don't talk about the program and its benefits.
“The Partnership aspect of the [Long-Term Care] policy can literally be the difference between long-term care expenses forcing a person and their family into financial ruin or not.” said Don Strickler, an Indiana based Long-Term Care Insurance specialist.Don Strickler, Long-Term Care specialist
“Unfortunately, in my experience, many financial planners take advantage of their “trusted advisor” status and do not take the time to educate their clients regarding the different types of policies that are available. In short, they sell their clients something rather than help their clients purchasing something. The difference is remarkable.”
Cassandra Watson, President of NextGen Long-Term Care Planning, says that many top financial advisors are very much aware of the risk that long-term care can pose to their clients’ portfolios, but Partnership often flies under the radar.
“Partnership can be critical to give people a security blanket against catastrophic issues, and it provides extra peace of mind.”Cassandra Watson, President of NextGen Long-Term Care Planning
Several Types of Plans Available
There are several types of plans which you could choose from. It can be somewhat confusing, but Long-Term Care Insurance specialists usually have substantial experience in this area and can help consumers select the right plan.
In addition to traditional and partnership-certified policies, asset-based or “hybrid” policies are available. These combine life insurance with coverage for long-term care. With a hybrid policy, you will either receive the tax-free benefits for long-term care, or your family the get the tax-free death benefit. However, be sure the plan you are considering is an actual hybrid Long-Term Care policy that meets federal guidelines under Section 7702(b).
Goldberg says that hybrid options have become the most popular option for many consumers.
“One way or the other you will get the money you invest back.”Mark Goldberg
Most experts agree having some solution for long-term care should be part of your retirement plan. Being aware of the financial costs and burdens created with longevity is step one. Step two would be to start researching your options.
Use Research Tools
Start by finding the current and future cost of care services in your area. The LTC NEWS Cost of Care Calculator is an excellent place to start your research. You will also find critical state-specific information like the availability of Partnership Long-Term Care Insurance, tax incentives, and more. You will see both the current and future cost of long-term health care where you live - Cost of Care Calculator - Choose Your State | LTC News.
The American Association for Long-Term Care Insurance, a national consumer education, and advocacy group, suggests working with a Long-Term Care specialist to help you learn about your options and design and shop for the best coverage at the best value.
Planning for long-term care revolves around the family.
A Women’s Issue
"This is a women’s issue. Men need to plan for their wives and daughters. Women need to plan for their own security and peace-of-mind. About 80% of the healthcare workforce is made up of women. Often, a wife becomes the first caregiver when a husband becomes in need of extended care. Daughters, or daughter-in-law, often, without advance planning become a caregiver for a parent. We can do better. We can avoid crisis management with some type of affordable Long-Term Care Insurance."Matt McCann, a leading expert in long-term care planning
The best time to plan is, ideally, before you retire. Be ready to answer questions about your health, family history, and retirement plans so a specialist can make suitable recommendations based on your specific situation as policies are custom designed.
The underwriting criteria differ between insurance companies, and premiums can vary over 100%. A specialist will help you navigate the many options.
There are several reasons people want to plan for the future costs and burdens of aging in place before they retire. Sure, asset protection and access to quality care options are fundamental. However, it comes down to family.
Caregiving is demanding, and caregivers must deal with stress, anxiety, and burden. You can give your loved ones the time to be family instead of caregivers. You will enjoy quality care options when you need them. Your legacy will remain intact. But, you can't delay and ignore the risk.
Use this time during Long-Term Care Awareness Month and do your research and tax action. Premiums are much less expensive when you are younger and enjoy good health. Several tax incentives may apply to you as well.
The holidays are about family, and so is long-term care planning.
About the Author
Linda is a freelance writer interested in retirement planning, health and aging.
Contributor since October 31st, 2017
Affordable Long-Term Care Insurance can provide the guaranteed tax-free benefits that will give you access to your choice of quality care options, including care at home.
The ideal time to obtain coverage is in your 40s or 50s. Several types of policies, including traditional/partnership, certified policies, hybrid policies with death benefits, and limited duration, short-term plans are available.
An experienced Long-Term Care Insurance specialist will help you find appropriate coverage from the many available options - Work With a Specialist | LTC News.
The LTC NEWS Cost of Care Calculator is an outstanding source to see the financial impact of care no matter where you live - Cost of Care Calculator - Choose Your State | LTC News.
Other Available Resources on LTC NEWS
Many tools and resources are available on LTC NEWS to help you learn about your options to plan for aging's financial costs and burdens. The goal is to prepare your family and finances for the future costs and burdens of changing health and aging.
You can compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.
The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area.
There are also available tax incentives, and see if these tax incentives are helpful by reviewing the Long-Term Care Tax Benefits Guide.
Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.
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Benefits of Reverse Mortgages
There are many people today that have much of their savings invested in their homes. With today's reverse mortgages, you can use the money in your home to fund a Long-Term Care Insurance policy, add retirement income, or even pay for in-home care if you need care now.
You can ask questions to LTC NEWS columnist and host of the TV Show 62 Who Knew in the LTC NEWS feature "Ask Mike." His expertise in caregiving, aging, health, retirement planning, long-term care, and reverse mortgages can be a valuable resource - Reverse Mortgages | LTC News.
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