Long Term Care Insurance: How to Protect Your Assets from Long Term Health Care
We believe it is essential to incorporate advice about long term care insurance into our practice to help you protect your assets from long term health care in a nursing home or assisted living facility.
You've worked hard to create and build your nest egg and we've tried to be there every step of the way to help you manage your assets as you work toward your goal of living out your life with financial independence.
However, rising medical expenses and cutbacks in company provided health care benefits are causing anxiety among many retirees. In fact, healthcare expenses are one of the greatest fears, right after running out of money. This is understandable since, according to the Employee Benefit Research Institute - EBRI, a 65-year old couple retiring now without employer provided health care benefits could need as much as $295,000 for out-of-pocket healthcare expenses if they live to an average life expectancy. This estimate excludes the cost of long term care, which can run into hundreds of thousands of dollars for a nursing home stay.
It has been estimated that one out of every two Americans will require long term care during their lifetimes. Are your assets protected from the expenses that would result from needing long term health care?
In addition to helping you finance and pay for healthcare, we can help you evaluate care options. For example, long term care becomes necessary when an individual is unable to care for oneself without substantial assistance. The cause may be illness, injury or simply the effects of aging. The responsibility for care often rests on the family until the individual requires professional care in the home or in a nursing home at significant cost. While you may continue to fund retirement accounts and savings vehicles, long term care expenses can bring unimaginable changes for those who have not taken steps to protect their assets. We can help you determine if you are adequately protected against the financial consequences of long term care. Please contact us to schedule a personal consultation.
One very cost effective way to protect your assets from the risk of needing long term care is with long term care insurance. And the best time to get it is when you are younger and healthier. In fact, the average age of long term care insurance purchasers has fallen from 72 in 1990 to 58 in 2005 (U.S. Individual Long Term Care Insurance: Supplement LIMRA International).
When
people are working, however, they are often oblivious to healthcare
costs or they mistakenly assume that employer provided coverage will
continue in retirement or that Medicare will cover more than it does.
According to a recent AARP study (The Costs of Long Term Care: Public
Perceptions Versus Reality in 2006 -- AARP Fact Sheet):
- Fewer than one in ten people correctly estimate the monthly cost of a nursing home
- Fewer than 25% correctly estimate the monthly cost of an assisted living facility
- Nearly 60% incorrectly believe Medicare will pay for an extended nursing home stay
- More than 50% incorrectly believe Medicare covers assisted living costs
It is extremely important for you to understand the risk of needing long term care and that long term care insurance can help you pay for the care you may need, instead of having to use your life savings. No one ever questions the need for life insurance, homeowners insurance or auto insurance. One in 1,200 people will use their fire insurance. One in 248 people will use their auto insurance. One in two people will need long term care.
At W.E. Griffith & Associates, LLC, we
are committed to consulting with our clients and others who live and
work in Pittsburgh (or surrounding areas) about their health as well as
their wealth. We are dedicated to helping you finance and pay for your
healthcare through cost-effective vehicles, such as health savings
accounts (HSAs) and long term care insurance. HSAs can be used to save
money for health insurance premiums and out-of-pocket expenses in
retirement. Purchasing long term care insurance can help protect your
retirement accumulations versus trying to pay for long term care needs
by saving. But long term health care planning, including purchasing
insurance to protect other assets, has to happen at younger ages.
Unfortunately, the cost of today’s long term care insurance policies
can often be prohibitive for those over a certain age. At that point,
the only options may be to pay for services out-of-pocket by using
accumulated assets or to rely on family or friends to take care of you.
The solution is to be proactive. The solution is to think ahead.
Return
from Long Term Care Insurance to Client Update
