Long-Term Care

Protect Your Financial Security From High Long-Term Care Expenses

Transfer Long-Term Care Costs at a Fraction of the Price

A man consulting his caregiver.

Planning for retirement involves many considerations, with long-term care (LTC) being a significant concern. Statistics show that a majority of individuals will need LTC at some point in their lives, often for extended periods. The costs associated with LTC can be substantial and pose a threat to your financial stability and retirement plans. To address this risk, transferring the financial burden to an insurance company through a long-term care policy is a prudent strategy. Recent developments in insurance policies, such as hybrid policies, offer more comprehensive coverage and financial security. Consulting with a professional can help you understand your options so informed decisions can be made to protect your assets and ensure a comfortable retirement.

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Long-Term Care Is a Real Threat to Your Retirement

For those close to retirement, thoughts of great things ahead create excitement for life's next chapter. Spending time with kids and grandkids, traveling the world, golfing and fishing daily, or simply relaxing at a coastal home are but a few of the possibilities. For many, retirement can last as long as working, especially with increasing life expectancies. However, a major risk to a fruitful and stress-free retirement is long-term care. 

According to the Center forMedicare and Medicaid Services, seven out of 10 people turning age 65 will need long-term care at some point in their lives. In addition, 90 percent who enter long-term care claims do not recover. Many will require care for five years or longer.

A 2021 Genworth cost-of-care survey indicates the average cost for a private nursing home room in Georgia is $7,773 per month, or $86,076 per year, with an average annual increase of 7percent. Home care and assisted living costs are less but are also a great risk to a person or couple's liquidity and financial stability. If you might need long-term care, you want to take steps now to understand your options and prepare for your future. You will want to preserve your assets and protect your liquidity and prevent the possibility of running out of money. This will enable you to continue your independence by having the kind of care you want for as long as possible. You will also want to protect your family. By planning for care now, it allows your loved ones to care about you, instead of having to care for you.

The best way to plan for long-term care is by transferring risk to an insurance company. Doing so will allow you to pay pennies on the dollar rather than dollar-for-dollar for care.The premiums you pay for a long­term care policy are substantially less than having no coverage and paying 100 percent out of pocket. Policy offerings have greatly improved in the last several years.

Historically, traditional long-term care insurance policies have dominated the market. However, many long-term care insurance carriers did not price their premiums adequately, which has led to rate increases, limited benefit periods, and the exit of multiple carriers from the long-term care market. The rise of hybrid policies has provided consumers with a better solution. A hybrid policy comes with along-term care rider. The death benefit provides long-term care benefits while alive; and, if care is not needed, the death benefit is paid to your heirs. In addition, there is a carrier that offers lifetime (unlimited) benefits. The premiums are guaranteed and cannot increase, unlike traditional policies.People appreciate this type of policy design as they receive a return on their premiums, regardless of future life events.

There is no one-size-fits-all planning solution, so it is important to learn what options are available. Each person's finances, health and objectives are different, and individual or joint policy quotes should be explored. You may decide you want to fully insure, partially insure, or assume the risk entirely. Whatever you decide, you will feel good knowing you have been educated on this exposure and have planned accordingly.

Knowing that you have planned for your future will ensure that long-term care costs will not impact your ability to leave a lasting legacy for your family, charity or place of worship.

Watch a video about the impact of Long-Term Care

Frequently Asked Questions

How much can I expect to spend on long-term care?
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In 2023, the annual median cost for long-term care in the United States ranged from $24,700 to $116,800, depending on the type of service.

A recent Genworth cost-of-care survey revealed that the average cost for a private nursing home room in Georgia is $7,773 per month or $86,076 annually, with an average annual increase of 7%. Home care and assisted living costs tend to be less.

What can I do now to help ease the cost of long-term care?
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The best way to plan for long-term care is by transferring risk to an insurance company. Doing so will allow you to pay pennies on the dollar rather than dollar-for-dollar for care. The premiums you pay for a long­term care policy are substantially less than having no coverage and paying 100 percent out of pocket.

What are the types of long-term care insurance?
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1. Traditional Long-Term Care Insurance
  • Specific coverage for long-term needs, including nursing home care, assisted living facilities, home health care, and adult day care.
  • Premiums are generally lower when purchased at a younger age.
  • Flexibility to choose care providers and services.
  • Premiums can increase over time, sometimes significantly.
  • If you never need long-term care, you may not receive any benefits, and the premiums paid may be lost.
2. Hybrid Long-Term Care Insurance
  • Combines long-term care coverage with either life insurance or annuities, offering a death benefit or cash value accumulation feature.
  • Premiums are typically fixed and guaranteed not to increase.
  • If long-term care is never needed, the policiy provides a benefit to beneficiaries.
  • Generally requires a larger upfront premium payment compared to traditional long-term care insurance.
  • Policy features and benefits can vary widely among insurers.
3. Life Insurance with a Long-Term Care Rider
  • Offers flexibility by allowing access to the death benefit to pay for long-term care needs.
  • Premiums are typically fixed, and benefits are guaranteed.
  • If long-term care is not needed, the policy provides a death benefit to beneficiaries.
  • Accessing the long-term care benefits may reduce the death benefit available to beneficiaries.
  • Policyholders may need to meet specific criteria to qualify for long-term care benefits.
  • The cost of adding a long-term care rider to a life insurance policy can vary and may increase premiums.

When choosing a long-term care insurance policy, it's essential to consider your financial situation, risk tolerance, health status and long-term care preferences to determine which type of coverage best suits your needs. We help you navigate the complexities of long-term care insurance options.

What is the best age to buy LTC insurance?
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Your age doesn't just play a role in your access to long-term care insurance; it's also a factor in the premiums you pay. In general, you'll pay lower premiums if you enroll in a policy in our mid-50s than you would in your early- to mid-60s.

Also, you must qualify via a medical underwriting so applying now when you are younger and healthy is best.

Where is long-term care provided?
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  • Adult day care center: These centers offer care and supervision during the day for adults, typically in a group setting. They provide activities, meals, and sometimes health-related services.
  • Assisted living facility: Also known as residential care facilities, these provide housing and personalized care services for individuals who need help with activities of daily living but do not require the intensive medical care provided in nursing homes.
  • Hospice care: This type of care is focused on providing comfort and support to individuals with terminal illnesses and their families. It aims to manage pain and symptoms associated with the illness.
  • Nursing home: These licensed facilities provide 24-hour nursing care, room and board, and assistance with daily activities for individuals who require more intensive medical and personal care.
  • Home care: Long-term care can also be provided in the individual's own home through various services such as home health care, hospice care, and respite care. This allows individuals to receive care in familiar surroundings.

Other types of long-term care include custodial care, which assists with daily activities without requiring medical training, and skilled nursing care, which involves daily nursing and rehabilitative care provided by trained medical personnel.

What is the most significant risk factor that leads to long-term care?
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The most significant risk factor that leads to long-term care need is often advanced age. As people age, they are more prone to developing chronic conditions and disabilities that may require assistance with daily activities. Other significant risk factors include:

  • Chronic Health Conditions: Individuals with chronic conditions such as Alzheimer's disease, stroke, arthritis, diabetes, heart disease, or other debilitating illnesses are at a higher risk of needing long-term care.
  • Functional Limitations: Physical or cognitive impairments that affect a person's ability to perform activities of daily living (ADLs) independently, such as bathing, dressing, eating, toileting, and transferring, increase the likelihood of requiring long-term care.
  • Lack of Social Support: Limited social support networks or family caregivers can also increase the risk of needing long-term care, as there may not be adequate assistance available to help with daily needs.
What is the most common diagnosis in long-term care?
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The 10 most common chronic conditions among residents are high blood pressure (57%), Alzheimer's disease or other dementias (42%), heart disease (34%), depression (28%), arthritis (27%), osteoporosis (21%), diabetes (17%), chronic obstructive pulmonary disease and allied conditions (15%), cancer (11%), and stroke (11%).

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