Long-Term Care Insurance: The Importance of Planning Ahead

The past year has provided plenty of time for reflection on family and how to better plan for the future in order to protect yourself and your loved ones financially. A part of that planning process should include evaluating your long-term care insurance needs.

What is long-term care?

As people age, the need for added support or services to carry out either personal or health related tasks can arise. Long-term care is defined as the medical or non-medical support needed by an individual for an extended time. To get an idea of how common the need for care is, consider the current aging population. Until the year 2030, 10,000 Baby Boomers will turn 65 every day, and 7 out of 10 will need some form of long-term care.¹ It is also important to note that, while long-term care may be associated primarily with seniors, this prolonged care is for any individual who suffers from an illness, accident or disability that requires them to have some form of regular medical care.

Why is it important to plan ahead? 

One of the most important factors to consider when talking about long-term care planning, is also one of the most often overlooked: the caregiver. According to a survey by The Associated Press-NORC Center for Public Affairs Research, four in 10 Americans have provided long-term care to a relative or friend.² That same survey found that approximately one third of caregivers have neglected their own health needs (missing dentist appointments, prescription refills, etc.) because they were “too busy with their caregiving duties.”²

Why long-term care insurance? 

Long-term care insurance is not "nursing home" coverage but insurance that helps assure to a policyholder, and their loved ones, of continued independence as they age without exhausting their personal assets.

Long-term care is expensive and often not covered by insurance. Care costs vary depending on the patient’s state of residence. According to the Genworth Cost of Care Survey 2018¹, the national average cost for a private room in a nursing home is $100,375 annually. The estimated annual salary for an in-home health aide is approximately $50,336 per year.¹ Medicare does not cover long-term care services and Medicaid will provide such care services only for eligible individuals who meet certain financial and medical criteria. The cost of care, or having to provide care themselves, can become a burden to not only the patient but to their loved ones as well.

Long-term care insurance is often less expensive than many may assume. Additionally, there are ways to minimize premiums and/or take advantage of discounts offered through membership with various associations. For example, organizations like the American Academy of Pediatrics, alumni associations or other professional groups may offer discounts on coverage as a member benefit. For additional information about long-term care insurance, visit the AAP Insurance website here.

Resources:

1. Genworth Cost of Care Survey 2018, conducted by CareScout®, June 2018, Retrieved June 6, 2019, from https://www.genworth.com/aging-and-you/finances/cost-of-care.html
2. AP-NORC Poll: Many caregivers neglecting their own health. October 15, 2018. Retrieved June 12, 2019, from https://www.longtermcarepoll.org/ap-norc-poll-many-caregivers-neglecting-their-own-health/