Long-Term Care Insurance

Long-Term Care Insurance can Protect your Long-Term Financial Future

Long-Term Care Insurance may be the least expensive, best way to ensure that the cost of care does not put an undue burden on your family.

Why Buy Long-Term Care Insurance (LTCi)?

To help prevent decreasing your assets, minimize your dependence on other family members, and control where and how you receive long-term care services.

What is Long-Term Care (LTC)?

Long-Term Care encompasses medical and support services for people with a degenerative condition (eg Parkinson’s, stroke, etc.), a prolonged illness such as cancer or a cognitive disorder (Alzheimer’s). Long-Term Care is not necessarily medical care, but ongoing “custodial care” needed to perform some of the usual Activities of Daily Living (ADLs) due to illness or injury, or supervision due to dementia or Alzheimer’s.

Long-Term Care Costs can be Expensive

Prices for long-term care services vary according to the type of service you need, how often and for how long you need it, as well as, where you live. The 2007 national average for a private room in a nursing home is $74,8061 (Genworth Financial 2007 Cost of Care Survey). Even home care and home health aide services add up.

According to AARP’s 2007 statistics, the average U. S. costs are:

• $5,566 a month for a semi-private room in a nursing home = $66,792/year
• $6,266 a month for a private room in a nursing home = $75,192/year
• $2,968 a month for care in an assisted living unit = $35,616/year

Costs Can Add Up Quickly

For example, if you have a home health aide assist you with bathing three times a week, you’ll pay, on average, $19 per hour (possibly with a 3 hour minimum) or $57 x 3 days = $171 a week. This would amount to nearly $9,000 a year just to get a bath!

How are LTC Services Provided?

LTC services may be provided in your home, in a family member’s home, at Adult Day Care, at an Assisted Living facility or in a Convalescent Care, Custodial Care or Skilled Nursing facility.

How Will You Pay For Long-Term Care Insurance?

Many people think that Medicare or private health insurance will pay the costs, but Medicare and private health insurance, including MediGap, don’t pay for much, if any, long-term care.

Medicare

Medicare pays extremely limited benefits for medically necessary skilled nursing in a facility or at home, for up to 100 days following at least 3 days in hospital. Medicare does not pay for Custodial Care. (The Original Medicare Plan pages 53-55). You pay $0 for days 0-20; $124/ day for days 21-100 and; 100% beyond day 100. (2007)

Medicaid

Medicaid is a federal and state funded program which helps low-income individuals and families pay for some or all of their medical bills. Medicaid may help pay for nursing home care and sometimes services at home. People whose income is higher, but who have high medical or long-term care bills can also become eligible for Medicaid. You must meet eligibility criteria, and income and assets rules apply.

Veteran’s Affairs

Veteran’s Affairs may provide long-term care for service-related disabilities or for certain eligible veterans. Veterans who do not have service related disabilities, but who are unable to afford to pay for long-term care are also eligible for assistance.

Personal Assets

Funding your Long-Term Care personally may be appropriate if you can absorb an additional expense of $50,000- $100,000 or more for 5-10 years without depleting your assets.

Long-Term Care Insurance

This may be the least expensive, best way to minimize the risk of decreasing your assets.  LTCi premiums also may be income tax deductible.

Who Can Purchase LTCi?

Reasonably healthy individuals and couples into their 80s may be candidates for LTCi. Quite often one or more of “the kids” will pay all or part of the LTCi premium for the parents. It may not be feasible for an incapacitated parent to move in with the child’s family. LTCi could shield the child’s savings, or the grandchildren’s college fund, at a fraction of the cost of nursing home care.

Long-Term Care Insurance can Protect Your Financial Future

Soaring health care costs, increasingly restricted coverage and eligibility requirements, and the need to stretch retirement savings through more years are all reasons to consider LTCi. IPS Advisors represents a number of high quality LTCi carriers and can design and customize your LTCi policy to maximize your coverage and lower your premium as much as possible.

IPS Advisors can help you with the following:

• Individual or Group
• Traditional or Asset-based
• Corporate paid LTCi for selected executives