Long Term Care Insurance Can Help Protect Your Assets


How will you pay for long term care?

The sad fact is that most people don’t know the answer to that question but a solution is available.

LTC insurance will become a very important factor in financial strategies for baby boomers and the reasons to get a LTC policy after age 50 are very compelling:

  • The premium payments buys you access to a large pool of money that can be used for long term care costs but by paying for LTC out of that pool, you can preserve your retirement savings and income.
  • The cost of assisted living or nursing home care alone could motivate you to pay these premiums. Genworth Financial conducts a respected annual Cost of Care Survey to gauge the price of long term care in the U.S. The 2010 report found that:
    1. In 2010, the median annual cost of a private room in a nursing home is $75,190 or $206 per day – $14,965 more than it was in 2005.
    2. A private one-bedroom unit in an assisted living facility has a median cost of $3,185 a month – which is 12% higher than it was in 2009.
    3. The median payment to a non-Medicare certified, state-licensed home health aide in 2010 is $19 per hour, up 2.7% from 2009.1
  • The most recent (2009) estimate of LTC costs from the U.S. Department of Health and Human Services was even higher than the Genworth survey – $219 per day for a private room in a nursing home, or $79,935 per year.2
  • AARP notes that approximately 60% of people over age 65 will require some kind of long term care during their lifetimes.3

The earlier you opt for LTC coverage, the cheaper your premiums. Additionally, LTC coverage will pay for a wide variety of nursing, social, and rehabilitative services at home and away from home, for people with a chronic illness or disability or people who just need assistance bathing, eating or dressing.4

Medicare is not long term care insurance! However, Medicaid can pay for long term costs but only if you’re destitute. Long term care insurance annual premiums are nothing compared to real-world LTC costs.5

If you would like to explore LTC Insurance, contact our office today to talk to one of our financial professionals about LTC options.

Article Disclosure:
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice. The publisher is not engaged in rendering legal, accounting or other professional services. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. If assistance or further information is needed, the reader is advised to engage the services of a competent professional.
1 – genworth.com/content/etc/medialib/genworth_v2/pdf/ltc_cost_of_care.Par.85518.File.dat/Executive%20Summary_gnw.pdf [4/10]
2 – longtermcare.gov/LTC/Main_Site/Paying_LTC/Costs_Of_Care/Costs_Of_Care.aspx [5/12/10]
3 – aarp.org/families/caregiving/caring_help/what_does_long_term_care_cost.html [11/11/08]
4 – pbs.org/nbr/site/features/special/article/long-term-care-insurance_SP/ [11/11/08]
5 – longtermcare.gov/LTC/Main_Site/Paying_LTC/Private_Programs/LTC_Insurance/index.aspx [6/25/09]

Comments are closed