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Planning for Long-Term Care

Planning for Long-Term Care

April 06, 2023

Long-term care can be an expensive drain on a family's resources. As the US population life expectancy continues to grow, it makes financial sense to protect yourself, your family, and your assets for if and when the need for long-term care arises. To better understand long-term care, we must answer three important questions.

What is long-term care?

Long-term care is not just nursing home care. It does include care in a nursing home if or when needed, but it also includes assisted living facilities, which are environments for individuals who can no longer function independently but don't need daily care. More importantly, it includes home care where a hired assistant comes into the home to provide aid. Long-term care also covers respite care, which is designed to give a break to a family member who provides long-term care services for a loved one.

What does it cost?

Long-term care costs can vary from state to region. According to Genworth's "Cost of Care Survey" the national average for a skilled nursing home is over $108,000, for an assisted living facility, roughly $54,000. Lastly, at-home care could run as much as $40,000 to $50,000. Now, if you stretch those numbers out for 4 years or even longer, then you can see how quickly it could drain your assets. There are many cases where both the husband and the wife require care at the same time. Which, of course, doubles the expenses.

What are your options for funding long-term care?

There are two primary choices for funding long-term care expenses. The first way is to self-insure, which involves being financially prepared and then depending on your personal savings and investments to fund any possible long-term care expense. However, this can be risky and can quickly drain your assets. The second way is to acquire a long-term care insurance policy to leverage your savings and investments. Having a long-term care policy in place could prevent you from dipping partially or entirely into your retirement funds.

In conclusion, the aging of America comes with certain challenges, and long-term care is one of them. With an increasing number of people expected to reach the age where they're likely to need some type of assistance, it's important to have a better understanding of long-term care and how it works. If you would like help running the numbers, please email, call, or reach out to us through our social media channels.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional.