The FACTS and FICTION of Long-term Care Financing

I will not need long-term care in my lifetime. False. Sixty (60%) of Americans will need some long-term care (LTC) during their lifetime. Family members may be able to provide care in some situations. Or LTC services may be purchased to provide help at home or in a facility setting. The average long-term care stay is two and a half years.

I don’t need LTC insurance; my children will take care of me. Most likely they will. But the physical, emotional, and financial strain of providing care for a loved one can take its toll. LTC insurance plans can be designed to support care provided by the primary family caregiver, thereby preventing you from becoming a burden on your family.

The government will pay for my long-term care? False. Medicare pays primarily for medical care such as doctor and hospital costs and has very limited long-term care benefits, averaging just 23 days IF you meet the qualifying requirements. Medicaid will pay for LTC, but only IF you have limited income and assets less than $2,000. In 2006 Congress restricted Medicaid eligibility to the very poor, sending a message to the American public that they are responsible for paying for their own LTC.

Is LTC insurance my only choice? No, you may choose to pay for care services out of pocket. But with inflation doubling the cost of care every 15 years, many individuals choose to transfer the risk of catastrophic coverage to an insurance company.

LTC insurance will restrict my ability to choose where I want to receive care. False. In fact, the opposite is true. LTC coverage provides you with choices. Close to 70% of individuals who receive benefits from LTC insurance policies today receive care at home or in a community setting.

I’ve heard that LTC insurance isn’t affordable. It is the actual cost of LTC that is expensive, projected to increase to $120,000 per year in the next 15 years. The premiums are just pennies on the dollar.

I’m too young to think about long-term care. False. If you are in your 40s or 50s it is the perfect time to start thinking about your LTC plan. The younger and healthier you are when you start planning, the more options available to you. And when you invest early, your pool of money will have more time to grow before you dip into it to pay for care, maximizing your investment. Youth and good health discounts you may qualify for in your 40s and 50s will remain in place throughout the lifetime of your policy.

I will pay less over time for LTC coverage if I wait until I am older to purchase it. False. LTC premiums are structured so that you pay proportionately more the older you are at the time of purchase. Additionally, you may be required to pay a higher premium or be declined coverage due to existing health conditions at the time of application, leaving you to pay all your LTC costs out of pocket.

I don’t want to be pressured to purchase something that is confusing and expensive. Who can help me? A certified LTC specialist who works as an independent broker can be your best advocate. She can help you identify the level and type of coverage you need, then shop the market on your behalf, comparing plans to find you the best value. Additionally, with many optional riders and choices an experienced professional can tailor the plan to meet the specific needs of her client and their family.

What if I pay for LTCi and never use it? Well, that may happen. But if you are among the 60% of individuals who will need LTC in their lifetime, you and your family will be glad that you are prepared. Building a small plan or sharing coverage with a spouse or partner can maximize use of benefits. And, as with homeowners insurance, you hope you never have to use it. But if advancing age or declining health require you to seek extra care, you can eliminate the financial or emotional burden on your family.

My employer offers coverage through work. Is my employer plan always the best option for me? No. The LTC plan available through your employer isn’t necessarily the best plan for you and your family. Many of the discounts available in individual plans are not available through groups. And, some group plans do not offer the range of benefit choices available on the market. Consult a LTC specialist for a complimentary comparison.

What questions should I ask to begin putting my own LTC plan in place? Ask yourself these questions to get started: If you live a long life and need care, where would you like that care to be delivered? Who would provide your care? What impact will the need for LTC have on your spouse, children, and family or friends? How will you pay for that care?

I can’t afford financially to put a long-term plan in place. In fact, you can’t afford NOT to. Consultation with a LTC professional is complimentary. You owe it to yourself and your family to find out IF long-term care coverage makes sense for you. Armed with information, you can make an informed decision that is right for you and your family.

For more information about planning for your long-term care, check out these websites:

Use the Long Term Care savings calculator to see how much money you would have to save to accumulate enough to pay for your future long-term care. Click on Can I Save on My Own for LTC?

Provided by:Becky Wehrli, CLTC,,, 503-758-5725, toll-free 1-888-778-4164
Copyright © 2008 All rights reserved.

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