Who Needs Long Term Care?

10,000 Baby Boomers.

That’s the number of baby boomers who are retiring in this country every day.

Projections say that this number will continue to increase up to 2030. The number of older Americans who suffer from a form of disability will more than double by 2034.

This situation has led to an increase in the number of people who need long term care or should start planning for it. Now.

• 63% of the more than 10 million people who are receiving long term care are elderly (above the age of 65) while the remaining 37% are aged 65 or less.

Of the older Americans who have long term care needs, 40% are at or near the poverty level, and are probably covered by Medicaid (welfare for the less fortunate). The other 60% of older Americans in need of care are either self-paying for their care, or using a Long-Term Care policy of some sort.

Do I need long term care?

We are constantly buying all sorts of insurance, from auto to health, pets, home and boats. But when it comes to long term care insurance, comparatively very few people are signing up. Out of more than 300 Americans, only about 10 million have procured protection for long term care. This is despite the fact that your chance/risk of needing care is much higher (in fact many times higher) than the risk of losing your home or getting involved in a car crash.

Let’s take the case of Jane Herman, a 60-year-old who doesn’t have LTC protect. Her 83-year-old mother lives with her. She is suffering from Alzheimer’s disease and has to be given close supervision. When Jane is not home, she always has to make sure that someone else is around so that her mother cannot wonder around and perhaps get lost in the neighborhood. Jane has learnt, rather the hard way, that it is important to have such insurance.

In case you’re wondering how or why this form of insurance would make sense for you, take a look at the following three reasons.

• Get some peace of mind – buying LTC insurance is a positive step towards ensuring your peace of mind. Of course, you don’t want to get disabled so that you can invoke your policy. But you know that just in case that happens, you’ll be able to get the care you need and get it at a quality facility. This more so makes sense if you’re nearing retirement age, or are keen to plan your financial future.
• Protect your assets – a lot of the people who need long term care get it from home, while others will go to a nursing home, assisted living facility, etc. Let’s take the case of a nursing home, for example. The average cost of nursing home care in this country is over $90,000 per year. If it happens that you need LTC for three and a half years at a nursing home, you have to foot a total bill of $315,000. That’s a lot of money by all means. This devastating cost can likely deplete your entire savings, and eat into some assets that you put together so that you could leave something for your children. Typically, long term care plans cost $50,000+. By purchasing this policy, you slowly invest money (over the course of several years) to protect your assets and future savings.
• Cover your aging parents – it happens that one in three American workers is affected by the cost of long term care. Some people have a parent who needs LTC and they have to dig into their pockets to contribute to the needed care. That’s assuming the parents do not have LTC protection. In addition to being a financial burden, this can also strain you physically and emotionally, making you less productive at whatever you do. But you can avert all this situation by purchasing long-term care insurance for your aging folks. This way, you can rest assured that in the case they ever need long term care, they are getting quality services from a property of their choosing.

Worried about never using your policy? Try a hybrid plan

In an attempt to find out why a large number of Americans still do not have long-term care insurance, insurance carriers and other stakeholders commissioned a massive survey. The conclusion of this survey was that potential policyholders were concerned about buying LTC insurance and never getting to use it, in which case they felt that their premiums would go to waste. As a result, top insurance providers came up with hybrid plans, which essentially are a life insurance policy that has an LTC rider. In the case you need care, the company pays for it. But assuming you never need it, the company pays out a death benefit to your appointed beneficiary in the event of your death. Works both ways, doesn’t it?