Why You Should Get Long-Term Care Insurance

long-term care

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Many of us think we’re invincible and that we are going to live forever.  And even though we’re living longer – around 80 years, which is about 30 years longer than people living 100 years ago – that doesn’t necessarily mean we’re going to be healthy all our lives.

We all know having health insurance is a must, but many of us don’t know that health insurance doesn’t cover long-term care.

Long-term care is not medical care, but rather a variety of services which help meet both medical and non-medical needs of people who cannot care for themselves over a long period of time due to a chronic illness or disability. Most long-term care is not medical care, but rather assistance with basic personal needs of everyday life, such as bathing, dressing, etc.

Why You Should Get Long-Term Care Insurance

It is estimated that about 75% of people over 65 years old will need long-term care at some point in their lives.  And 20% of these people will need long-term care for over five years.

We all love to think that we’re not going to be part of that 75%, but life has a tendency of slapping us in the face and bringing us back down to reality.

Don’t let reality come knocking at your door and not be prepared because long-term care is very expensive.

Costs of Long-Term Care

Long-term care is expensive and it could put a dent on your savings in a hurry.

Home care costs an average of $20 per hour, and depending on your needs this could range from 4 hours a day to over 12 hours a day.  You can see how it could all add up fast.

Assisted living communities – which are facilities that assist seniors with everyday tasks, such as bathing and dressing, but that do not require the medical care that nursing homes provide – cost an average of $42,000 per year.

Nursing homes are even more expensive because they also provide medical care.  The average costs of nursing homes is $240 per day or $87,600 per year. That’s a lot of money that could be coming out of your retirement savings.

Who Covers Long-Term Care

As I mentioned before, long-term care is not covered by health insurance. Medicare and Medicaid are alternatives but not for everyone.

Medicare only covers a nursing home for up to 100 days.  Considering that 20% of people over 65 will require long-term care for over five years, this is really not a feasible option.

Medicaid is a solution, but only if you have an income low enough to qualify.  Meaning that you need to had depleted your savings or have no savings in order to get covered.  Again, not a feasible option for people who have been working hard to save all their lives.

You could always pay out of pocket, but given the cost of long-term care, be ready to use up all your retirement money.

The best solution is to purchase long-term care insurance.

Get Long-Term Care Insurance

Long-term care insurance costs an average of $2,200 per year or about $183 per month for 5 years of care.

You might think that $183 per month is a lot, but it is really not that bad considering the alternative cost of a nursing home – $240 per day.

If you are under 40 years old, you don’t need long-term care insurance.  But people who are 50 and up, should seriously consider getting long-term insurance because the premiums only go up as you age and you might be denied coverage due to pre-existing conditions.

You should also talk to your parents about their long-term care plans.  They might think they will never need it, but like I said, life has a tendency of changing our plans.  Think about how it will affect you if your parents need long-term care and can’t afford it.

Don’t wait too long to get long-term care insurance.  And like all other insurance: I hope to never need it, but I’ll be glad to have it if I ever need it.

Do you have long-term care insurance?  Have you considered it?

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  1. As a financial advisor, one of the biggest things I fear for clients over 60 is the unknown of healthcare costs and more specifically long term care costs. It’s hard to know sometimes if you will need it; however, once you do, it is a VERY expensive cost to maintain and I have seen it bankrupt families. So, I am a very big believer in long term care insurance and usually tell people to start looking into it after they turn 50, because the longer you wait, the more you open yourself up to the possibility of a medical situation that may prevent you from getting approved for it.
    Shannon @ Financially Blonde recently posted…Music Mondays – Anyway You Want ItMy Profile

  2. Even Steven says:

    I’ve thought more and more about buying this insurance for my parents, partially because I don’t think they would get it on their own and partially so they do not have to not allow any financial issues as a reason for not getting the insurance. I wonder how that would all work?
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  3. Long term care is definitely something that can realistically be needed for many people, so I think the insurance is worth looking into.
    MoneyMiniBlog recently posted…The Slight Edge and How it Can Make You RichMy Profile

  4. We do not have long term care insurance yet but I’m happy to know we should look into it when we are 50! We have 5 years to think about it;0)

  5. Aldo says:

    You have plenty of time before you have to think about it!
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  6. Tawcan says:

    Long term care insurance is definitely something you should look into once you get to a certain age. It’s expensive but it could very well worth it.