Even if you are in your thirties or forties you need to pay attention to this article. Your future retirement assets are at risk too.
You insure your homes yet there is only a 1 in 300 chance of a house fire. You insure your cars and yet there is only a 1 in 30 chance that you will have an auto accident. There is a 4 in 10 chance you will need long term care yet very few people insure their retirement assets to protect those assets from long term care expenses. Yes, long term care expenses are the #1 treat to your retirement assets.
According to “Genworth’s cost of care survey” for 2017, here are the average annual cost in Pennsylvania:
- Homemaker services (care in the home) $50,336
- Adult Day Care $16,120
- Assisted Living Facility $41,400
- Semi Private Nursing home room $111,325
What is long term care? Long term care is help needed to assist with the activities of daily life such as bathing, dressing, eating, using a toilet, continence or transferring from a bed to a chair. You may need this care in the home or in a facility. How long would your retirement assets last if one or both of you needed long term care?
Here are some solutions:
- Pay out of pocket. Even if you can afford to do this I can show you a better way
- Medicare – Medicare only covers skilled care after being in the hospital for 3 days. So if you just need custodial care or are not getting better Medicare will not help you. Even if you do receive Medicare benefits for long term care they only last for 100 days. (20 of those days at $0 copay and 80 of those days with a copay of $167.50.)
- Medicaid – Many with minimal assets will need to use Medicaid.
- Private Insurance. Long term care insurance has changed dramatically.
Up to a few years ago if you purchased long term care insurance you received a policy similar to a disability policy and you had a certain monthly benefit for a certain number of years. The problem with these policies were that the price was not fixed and most policies saw many increases in premiums. In addition, if you never needed to use the policy and passed away your heirs received nothing. Many insurance companies have gotten out of this market.
Did you know that today you can use life insurance benefits to pay for your long term care? You purchase a permanent life insurance contract that includes a long term care insurance rider. If you qualify for long term care benefits (same qualification as the old policies) you can start taking up to 4% of your life insurance benefit monthly to help you pay for long term care expenses. That means if you have a $250,000 life insurance policy you may be able to take up to $10,000 a month to pay for your long term care. When you use all of the $250,000 death benefit then the policy ends. Best of all if you never need long term care and pass away then your heirs would receive the $250,000 death benefit.
So why should you care if you are in your thirties or forties? Since this is life insurance the younger and healthier you are the lower the cost. You can have plans that will be paid up by the time you retire.
As always Spencer Insurance Agency wants you to understand your options. Check out our website for more information about long term care insurance. Contact us today to set up a time to talk about long term care expenses and long term care insurance. Decide for yourself how much of your retirement assets will be protected against long term care expenses. Spread the word to your friends and family because few people know about this option.