Does the term “long-term care” make you think of nursing homes? Then you might be surprised to learn that for most people, long-term care refers to services and support provided in the home or in a community setting. In fact, according to a recent PBS NEWSHOUR article, nearly nine out of 10 Americans who need long-term care get that support from family members or friends who volunteer. And there are plenty of other facts about long-term care that might surprise you.
For instance, do you know the value of all that informal long-term care provided by friends and family? According to the Congressional Budget Office’s 2011 estimate, it’s a staggering $234 billion. “Invaluable” would be another way to put it!
LTC is more expensive than most people realize
According to Genworth Financial, one year in a private room in a nursing home will cost about $84,000. That’s more than a year at Harvard ($56,000), a year in prison ($31,000), or a year of infant care in New York City ($14,000). For a breakdown of average costs and a few more statistics that may surprise you, check out LongTermCare.gov.
Also, anyone who assumes government programs will take care of their long-term care needs could be in for a costly surprise. Medicare only pays for long-term care for those who require skilled services or rehabilitative care, and it doesn’t pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of LTC services. And a person must meet strict income and state eligibility requirements to qualify for Medicaid assistance.
Why should everyone plan for long-term care?
Because of another fact that surprises many people: Seventy percent of us will need some type of long-term care after age 65. With that fact in mind, it’s surprising how few people have a financial plan to cover long-term care. In 2012, just over 8 million Americans had long-term care insurance according to the American Association for Long-Term Care Insurance. When you consider the millions of aging baby boomers who are retiring, it’s easy to see that many of them simply won’t be prepared to shoulder the burden of long-term care without depleting their precious retirement resources.
What shouldn’t be a surprise to anyone is that we all need serious financial protection for our golden years. Your clients’ best hedge against the financial struggles that too often accompany long-term care is long-term care insurance (LTCI). In fact, without LTCI, they’re putting all of their other assets at risk. After all, if they should require long-term care, it has to be funded from somewhere. Many LTCI policies cover some home and community-based services, so regardless of where a person wants to receive long-term care, LTCI should be seen as a crucial tool for retirement planning.
Brokers should also stress that it’s never too early to start planning for long-term care. Can you guess the age of the youngest person ever to make a claim for long-term care insurance? How about the oldest? You’ll have to read the article to find out!
To learn more about helping your clients avoid the financial surprises of long-term care, download our LTCI Broker Kit today. And remember, long-term care insurance quotes are available through the DIS online quote engine 24/7.