Long-term health care is growing more costly. A recent study by Fidelity Investments found that a 65-year-old couple often spends an average of $85,000 to insure against their own long-term care expenses.
By definition, long-term care provides specific personal-care services when you are unable to take care of yourself without assistance for an extended period of time.
Most often, people think of nursing homes for long-term care, but care also includes the type provided in assisted-living facilities and adult day care and by in-home care.
Government estimates expect the number of Americans using long-term care services to increase from 13 million in 2000 to 27 million by 2050. And, according to the U.S. Department of Health and Human Services, nearly 60 percent of people older than age 65 will require at least some type of long-term care during their lifetime.
Here are some tips for planning for long-term care:
Know the insurer’s financial strength.
You’ll want a sound, stable, highly rated company.
Keep pace with inflation.
Many policies offer inflation protection so your benefits keep pace with inflation. With health-care costs increasing between 4 and 6 percent annually, this benefit is crucial.
Hold the taxes, please.
Look for a policy that is qualified for income tax purposes. This means that any benefits you receive from the policy would generally be considered tax-free.
Make it “to go.”
Be sure you understand what your policy covers and does not cover. Some policies offer the option to stay at home or receive care in a nursing facility.
Shop EARLY.
Just like shopping for gifts during the holidays, you’ll find the best selection of choices if you shop early. Many companies offer preferred rates if you’re healthy (another reason to apply when you’re younger) as well as discounts if your spouse purchases a policy as well.
Long-term care insurance is truly an evolving area, and a financial professional can help you arrive at what’s best for your situation. Investigate your options. It might be worth it.
You might even save a dime – or 850,000 of them.
