With just the utterance of these words, "Long Term Care" immediate thoughts of a nursing home comes to mind. Who wants to deal with this notion? Of course the answer is "No one". Yet, this notion is not a fair depiction of this subject. On the contrary, proactively planning for care allows for early assistance that is designed to keep you out of full-time facilities like nursing homes. So, while nursing homes may be a chapter on the subject, Long Term Care envelops much more.
For all of us, we basically have three choices when if comes to planning for our Long Term Care:
- Pay for it yourself: OK, just grab your chair, because today costs nationally are approximately $200 per day or $72,000 per year. Of course these costs will continue to rise due to inflation and the demand (people living longer and baby boomers approaching) that is expected.
- Plan for assistance: Either family members helping or taking you in or governmental assistance. In the former case consider the financial and emotional load for your family. In the later case, know that this is called Medicaid (not Medicare) and is a form of welfare. In order to qualify, you must first meet conditions; normally this includes meeting federal poverty guidelines. Without getting into the rules, suffice it to say the government is making this more and more restrictive, and you simply cannot assume you will qualify. Also, planning for this incorrectly may have dramatic financial consequences for spouse or other family members.
- Insure against the risk: Long Term Care insurance can either be purchased privately or sometimes through a group plan at your place of work. Both have tax related incentives, and in Minnesota (as well as other states), additional incentives to consider insurance as part of the solution.
- Do nothing: Ignore the subject. This path is by default either choice #1 and/or #2. Also, planning to die before needing care is in my estimation, ignoring the subject.
For employers, Group Long Term Care insurance plans are quickly becoming more recognized as valued benefits by employees, and worthy of consideration for your group's retention model. As Group Long Term Care insurance plans are transferable, unlike some other group benefits, Group Long Term Care insurance can add value that carries beyond their working years. Additionally, premiums are generally fully tax deductible by the employer, and the employee.
The average lifetime chance of needing long term care for an individual 65 years or older is more than 40%. It is estimated that approximately 49% of people turning 65 will need LTC at some point in their lives2. As a Financial Advisor, and with these statistics in mind, Long Term Care is a chapter in everyone's financial plan or future. Whether you have a formal plan or not; It's Part of the Deal.
