More Focused on Your Funeral Instead of Longevity and Long-Term Care?

A new research study shows we focus on death than living. Longevity continues to be a major retirement concern. The costs and impact of long-term care needs to be a key component of your planning.

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More Focused on Your Funeral Instead of Longevity and Long-Term Care?
5 Min Read April 10th, 2019 Updated:March 6th, 2020

Breaking news … you have a 100% chance of dying. There is a good chance you have planned or at least thought about your funeral. According to a recent survey, more middle-income and upper-middle-income Americans have planned for that future funeral than having planned for the substantial costs that come with future long-term care services and supports.

Despite this, most people are discussing the potential impact of long-term care. There is a good reason, the U.S. Department of Health and Human Services indicates if you reach the age of 65, you will have a seven in ten chance of needing some long-term care service before you pass-away. 

Good Chance You Will Need Future Long-Term Care

The question is, when will you need extended care and for how long. Some people who have a family history of certain specific health conditions like Alzheimer's, for example, may be of higher risk of long-term care. 

America is getting older. Ten thousand people turn age 65 each and every day. A recent survey conducted by Banker's Life indicates that 81% of those aged 54 to 72 have a plan for their funeral, but only 32% have plans for how they will receive and fund long-term care. Unfortunately, too many people plan for a family member to take care of them. Some people think their health insurance, Medicare, or their Medicare Supplement will pay for it. Some people think they can pay for care themselves, and still, others think it will never happen to them.

Cost of Long-Term Care Services Rise Every Year

The cost of long-term care is not inexpensive and continues to increase each year. The national average for one year of care at home, according to the LTC NEWS cost of care calculator, averages almost $4400 a month based on a 44-hour week. Base assisted living facilities average $4100 a month. Skilled nursing homes are very expensive and average $8600 a month. The cost of care varies based on your location.

Find the current and future cost of long-term care services in your area be using the LTC NEWS cost of care calculator

The cost of long-term care services will have a dramatic impact on your future lifestyle. A 54-year-old today, for example, will incur enormous costs in the years ahead. Based on past trends, in 30 years, when that 54-year-old is 84, the cost of this care will be dramatically higher. The average for one year of care at home is expected to run $10,182 a month 30 years from now. Base assisted living facilities average will run $9700 a month. You think that is expensive; in 30 years, the national average for skilled nursing is expected to run over $20,300 a month.

Have You Prepared Your Family and Finances for Costs & Burdens of Aging?

The survey showed that 79% said they have nothing set aside for these costs. For those who do have money put-away for long-term care, the amount saved is only $40,000. Generally, that would not last very long.

It is not that people would be surprised if they needed long-term care services, as 67% said they personally know someone who required extended care services. In addition, 36% of those surveyed admitted that they could not depend on family members to provide their care.

Have you prepared for these costs and the impact long-term care will have on your family? You probably have not yet done so. The easiest way to avoid the impact of long-term care is to never ever need long-term care in the first place. Since it is impossible to avoid, what can you do?

Today's Affordable Long-Term Care Insurance is the Solution

Since the 1970s, people have turned to Long-Term Care Insurance. These policies are working for American families. In 2019 alone, the major insurance companies paid for $11 Billion in long-term care benefits. This money helped American families obtain their choice of quality care without draining assets or placing a burden on the family.

Decades ago these were just policies that paid for nursing homes. Today's policies pay for all levels and types of long-term care, including care at home. Most claims actually start at home, according to research from the American Association for Long-Term Care Insurance.

Too many people assume Long-Term Care Insurance is expensive, or they think they could just take the premium they would have used for a policy and invest it each year.

Going back to the 54-year-old, let's assume a healthy couple, both age 54, obtain a policy. They could purchase a traditional policy offering $4000 a month, with $150,000 each growing 3% compounded each year and pay about $230 a month. Premiums can vary from company to company and are influenced by the amount of benefits you purchase, the inflation option you select, and your health. In 30 years, you would have paid about $70,000, but your benefits would be substantial. You would each have $364,089 in benefits with $9709 a month tax-free to pay for your care. Many companies offer shared benefits that allow you to use some of your spouse's benefits if you exhaust your own.

What happens if you just invest the $230 a month? If you earned 6% compounded, you would have a pre-tax amount saved of $247,299.41 compared to the $728,178 this couple would have in tax-free benefits in their long-term care policy.

Partnership LTC Insurance Provides Dollar-for-Dollar Asset Protection

Forty-five states offer Long-Term Care Partnership policies that provide additional dollar-for-dollar asset protection. In the event you exhaust benefits, you are able to shelter part of your estate based on the total amount of benefits paid and still access Medicaid. Medicaid otherwise requires you to exhaust almost all your assets in order to qualify.

There are also asset-based policies available. These are referred to by the industry as "hybrid" policies. A single premium can bring you a substantial amount of long-term care benefits as a rider on a life insurance or annuity policy. Some offer annual payments. The big difference is the ability to guarantee you will get money from the policy no matter what … live, die, or just change your mind.

People think of Long-Term Care Insurance as asset protection. It is. However, there are many consequences that come with longevity. If you don't have a policy in place your family will have the responsibility of taking care of the situation. They will decide the type of care you will receive and which funds will be used to pay for that care. Would you make the same decisions as they might in the future?

If there are few assets available, your family may also become caregivers. 

Caregiving is hard on loved ones in many ways. There is the physical impact of being a caregiver, which becomes harder as the caregiver themselves get older as years go by. There is also an emotional impact on your family. Plus, your kids will probably have their own careers, families, and responsibilities, which make being a caregiver or managing care very difficult.

Also, you should consider the impact of your lifestyle, especially the lifestyle of the otherwise healthy spouse. Your savings can drain fast, which adversely impacts your income.

Start Planning Young and Enjoy Lower Premiums and More Options

Experts say the best time to plan is when you are in your 40s or 50s. Long-Term Care Insurance offers affordable benefits, tax incentives, case management, and other services to lessen the burdens on everyone, including yourself.

For many American families, affordable Long-Term Care Insurance is an easy solution. Be sure to find a Long-Term Care specialist. Most financial planners and general insurance agents lack a good understanding of these policies and the health qualifications each insurance company requires. In addition, they generally have little or no experience in claims and policy design, which is indispensable. Plus, a true specialist will work with the major insurance companies, not just one or two. The insurance company is probably not local, so you just need a qualified person to find you appropriate coverage at the best value.

Use a Qualified LTC Insurance Specialist to Help Find the Best Plan

You don't need a person locally. Most specialists can help you no matter where you live, and they will have the qualifications to help find affordable coverage and service your policy going forward.

Remember, needing long-term care services doesn't necessarily mean you have little or no lifestyle. Depending on the reasons you require care, with the appropriate help you can still enjoy a good quality of life. Start planning now so you can enjoy your future retirement with peace-of-mind. 

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About the Author

Linda is a freelance writer interested in retirement planning, health and aging.

LTC News Contributor Linda Kople

Linda Kople

Contributor since October 31st, 2017

Editor's Note

Being prepared for future declining health and aging has never been more critical than right now. Long-term health care costs are skyrocketing due to increasing demand, labor shortages, and high labor costs. 

If you want to ensure you obtain quality care in the setting you desire, including in-home care, then getting affordable Long-Term Care Insurance is a vital part of your retirement planning. 

Long-term care is a cash flow issue, but it is also a family issue, and the consequences on loved ones can be dramatic. Family caregivers find it hard to juggle their careers and family responsibilities with that of a caregiver for an older parent. The burden is something most people have said in surveys that they don't want to place on their family.

LTC Insurance provides guaranteed tax-free benefits to access your choice of quality care options, including care at home. You will protect your income and assets and reduce the stress and anxiety otherwise placed on loved ones.

Planning Tools and Resources on LTC NEWS

You can find many tools and resources on LTC NEWS to assist you in your research for a planning solution or help your family find the appropriate care for a loved one at the time of crisis. 

To help you plan the costs and burdens of changing health and aging, LTC NEWS has put in place several resources, including:

Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.

Seek Professional Guidance

Insurance rates are regulated, so no insurance agent, agency, or financial advisor can give you special deals. However, insurance companies' premiums vary over 100% for the same coverage.

Experts suggest using a qualified Long-Term Care Insurance specialist to help you navigate the many options available to you and your family.

A specialist who works with the top companies can match your age, health, family history, and other factors and find you the best coverage at the best value. A specialist will save you money, and you will have peace of mind knowing they are making the appropriate recommendations - Work With a Specialist | LTC News.

Finding Quality Care for Mom or Dad

Start by reading our guides -  

If they are lucky enough to own a Long-Term Care Insurance policy, be sure they use it. Sometimes families wait, thinking they can save the benefits for a rainy day. Waiting on using available Long-Term Care Insurance benefits is not a wise idea. 

Get Help in Filing a Long-Term Care Insurance Claim

Quality care obtained early will help provide a better quality of life and reduce the risk of a deep decline and facility care. If you need help in starting the process of a Long-Term Care Insurance claim, LTC NEWS can help.

LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with a Long-Term Care Insurance policy. We have teamed up with Amada Senior Care, who will do all the work, free with no obligation. 

You can also get support in finding quality caregivers and get recommendations for a proper care plan, whether a person has a policy or not. - Filing a Long-Term Care Insurance Claim | LTC News

Benefits of Reverse Mortgages 

Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance.  

Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, even help with cash flow during your retirement. 

Learn more by asking questions to an expert. LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages. 

- Just "Ask Mike." - Reverse Mortgages | LTC News.

Share Your Knowledge - Be A Guest Contributor for LTC NEWS 

LTC NEWS is open to contributors to share their stories with the world. 

You can write a story or ongoing column for LTC NEWS. You can write about many topics, including aging, caregiving, health, lifestyle, retirement planning, and long-term care, to name a few.

Be sure to write for our core target audience of adults aged 40 and older. Our audience is worldwide; however, our primary target is the United States, Canada, the United Kingdom, and other English-speaking nations. 

Improve your website or blog's SEO and gain exposure and traffic at the same time by being a contributor to LTC NEWS. 

You can even promote yourself, your business, and your website or blog. However, it must have editorial content exclusive to LTC NEWS and not just an advertisement. It can include links to other sites, and you can share the article link once published on your website or social media.

Email your story idea or article: newsroom@ltcnews.com - LTC News Contributors | LTC News

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Use LTC NEWS to drive traffic to your website and help you attract people interested in your products and services. Plus, you can improve your website's SEO so more consumers can find you when they search for your products and services.

There are various marketing options available with LTC NEWS. Traditional advertising, sponsored content articles, strategic alliances, and more are available. 

Learn more about how LTC NEWS can help you market your business, drive traffic, and improve SEO - Advertise With Us | LTC News.

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LTC NEWS offers a 'helpful links' page so readers looking for additional information can find them easily. You can get a dofollow link to your website on LTC NEWS in exchange for a dofollow link on your site.

Let's work together and help consumers who search for us on the web - Site Request | LTC News.

You can also affordably purchase a dofollow link to your website or blog on LTC NEWS. Just contact the advertising department.

Sharing News with LTC NEWS 

Include LTC NEWS in your press release distribution. If your group, organization, business, political committee, etc., have news to share, send it to LTC NEWS. Email - newsroom@ltcnews.com  

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