When envisioning life in retirement, many individuals and couples dream of traveling the world, spending more time with loved ones or mastering a favorite hobby. But as Americans are living longer with medical costs simultaneously rising, one thing we often fail to plan for is the potential need for long-term care. Despite evidence that protection from life’s “what-ifs” is important, studies show that even the wealthiest consumers are missing the boat on long-term care insurance.

By Definition

Long-term care is ongoing assistance with some of the most basic activities of daily living (ADLs) such as eating, bathing, dressing, toileting or transferring (i.e., getting out of bed or a chair). The need most often stems from disability, chronic illness or cognitive impairment. Therefore, long-term care insurance helps offset costs associated with long-term care that are generally not covered by health insurance, Medicare or Medicaid. However, as individuals are living longer and the costs of care are increasing, fewer insurance providers are offering this type of coverage, and sometimes, for a price out of reach for low- and middle-income consumers.

Today’s Reality

– More than 8.3 million people receive support from one of five main long-term care services: home health agencies, nursing homes, hospices, residential care communities and adult day service centers.1
– At least 70% of people over the age of 65 will require some form of long-term care services and support during their lives.2
– The national average annual cost of one year in an assisted living facility is $43,200, while the national average annual cost of one year in a private room at a nursing home is $91,250.3
– Many consumers falsely believe that Medicare and Medicaid will cover all long-term care costs.
– The most common reason for not purchasing long-term care insurance is that it’s too expensive, even for ultra-high net worth investors (16% of those with a net worth of $5 million to $25 million cite that the cost is a deterrent4).

Tomorrow’s Outlook

Without taking appropriate steps to plan for this kind of “what-if” in life, you could wind up with retirement years that are less than golden. That’s why it’s important you consider your options for covering any future long-term care costs you may incur. Most commonly, these are:

– Self-funding
– Relying on family and friends
– Utilizing Medicare and Medicaid support
– Long-term care insurance and other funding solutions

Often times a combination of these resources is needed to obtain the kind of care you want and need, while reducing the burden on loved ones and protecting your assets. Contact us today to talk through your must-have plan for can’t-miss coverage.

1 Center for Disease Control and Prevention (2013) Long-Term Care Services. Available online at http://www.cdc.gov/nchs/data/nsltcp/long_term_care_services_2013.pdf
2 2015 Medicare & You, National Medicare Handbook, Centers for Medicare & Medicaid Services, September 2014
3 Genworth 2015 Cost of Care Survey, issued March 20, 2015. Available online at https://www.genworth.com/dam/Americas/US/PDFs/Consumer/corporate/130568_040115_gnw.pdf
4 Decisions Regarding Long-Term Care Insurance, issued August 2015 by Spectrem Group