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LTC Overview
What is long term care?
Services provided to people who are no longer able to take care of themselves due to chronic illness, injury, or the effects of aging. Care is typically provided in your home, a facility, or other community-based setting.
Did you know?
- About 10 million Americans age 65 and older now depend on long term care services, and that number is expected to double by 2040.1
- An estimated 70 percent of people who reach the age of 65 will need some form of LTC before they die.2
Why is long term care a growing concern?
1. People are living longer. That’s the good news. The bad news is that people are living
longer. The fact is the longer you live the more likely you will need care.
2. Families are geographically dispersed and women who traditionally took care of
parents are now working outside the home.
3. Government systems are already overburdened. This will only get worse once baby
boomers begin to retire. The federal government has recognized this and they are offering
LTC insurance to federal employees.
4. The cost of care keeps going up.
Nursing home average annual costs range from:
New York City $128,480
Denver $68,255
Chicago $57,305
Boston $108,405
Miami $77,015
Wash. D.C. $109,865
Currently, the average length of stay in a nursing home is 2.8 years.
Click here to view John Hancock Life Insurance Company's 2008 Cost of Care Survey.
What Are the Benefits of Long Term Care Insurance?
Long term care insurance gives you peace of mind when you need care. A policy can help:
- Preserve your independence;
- Maintain your standard of living;
- Protect your assets; and
- Preserve your freedom of choice.
Will I ever need LTC coverage?
According to the American Health Care Association, people in the United States who turned 65 in 1990, have approximately a 43% chance of needing long term care in a nursing home sometime in their future. This does not include the chances of needing care at home or an assisted living facility.
Should I still consider LTC insurance if I’m in great condition and my parents never needed it?
This is not a medical or health decision. This is a financial planning decision and should be discussed with an accountant, financial planner or attorney, not a physician. The fact that you are in great physical shape will help you qualify for the coverage at favorable rates.
Why do I need LTC coverage if my children plan on taking care of me?
By purchasing a long term care policy you are not preventing your children from taking care of you. You are simply removing some of the financial burden from their shoulders and giving them options. A good long term care policy will pay for care wherever you want it—in your home, your children’s home, adult day care and so on.
If I think I’m wealthy enough to self insure, do I still need LTC coverage?
In spite of the fact that many seniors are "wealthy", long term care costs are enormous and a lifetime of savings can be quickly exhausted when long term health care becomes necessary.
Consider how an additional yearly expense of $40,000-$55,000† (or double for a couple both of who needed care simultaneously) could impact you financially-- * How would this impact your retirement plan?
- How long could you afford these costs?
- How would this additional expense affect the estate you wish to leave behind?
- How can we assure that you maintain your financial security and independence?
Is Long Term Care Insurance a good idea for everyone?
Long term care insurance is an excellent idea for many; however each one of us should objectively assess their personal and financial situations. Consider the possible scenarios--
- If long term care insurance is purchased and never needed (which we hope will happen), then you may feel you have made a mistake in paying premiums.
- On the other hand, if long term care insurance is not purchased, and long term care is needed, a very, very expensive mistake has been made.
- If you purchase LTC with a lifetime benefit and then need care for only 1 and a half years, then you paid too much in premium.
- However if you purchased a 3-year benefit and need 18 years of nursing home care after a stroke, you will bear an incredible cost.
1. "Report Projects Future Need for Long-Term Care, Effects on Family and Public Policy." The Urban Institute. 5/7/07.
2. Council of Economic Advisors. Economic Report of the President. Washington, DC: U.S. Government Printing Office. February 2007."
† Prudential Research Report- "Long Term Care Cost Study"- 2010
The information on this page is only applicable to residents of Connecticut, New Jersey or New York. The information provided is not intended for residents outside of these states.
   
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*Fee-based financial planning services offered through Lenox Advisors, Inc. Lenox Advisors, Inc., offers access to securities and asset management services through MML Investors Services, LLC., 530 5th Avenue, 14th Floor, New York, NY 10036, 212-536-6000, member SIPC. Investment adviser representatives of Lenox Advisors, Inc. offering fee-based financial planning services may also be registered representatives and investment adviser representatives of MML Investors Services, LLC. for purposes of offering securities and asset management services, as applicable. Lenox Advisors, Inc. is a wholly owned subsidiary of National Financial Partners Corp. (NFP). Lenox Advisors, Inc and NFP are not affiliates or subsidiaries of MML Investors Services, LLC. Services offered through Lenox Advisors, Inc. as an Independent Registered Investment Advisor are not sponsored or offered through MML Investors Services, LLC.
Copyright (c) 2011 Lenox Advisors All rights reserved.
CRN201111-128530