Long-term care insurance helps pay for care in your golden years

Don’t wait until you’re 65 to think about medical care in your golden years. About 70% of Americans aged 65 and older will need some long-term care as they age, according to federal government statistics. The cost of health care continues to rise. So, long-term care (LTC) insurance may be able to help protect your financial assets later in life. Here’s what you need to know.

What is long-term care insurance?

Traditional health care insurance does not cover long-term care. LTC insurance offsets the cost of care not covered by Medicare or Medicaid. LTC policies reimburse you a fixed daily dollar amount if you need professional help performing basic life activities in your home, an assisted living facility or nursing home.

Who needs a policy?

Unless you have enough wealth to handle the possible costs of future medical care beyond what Medicare or Medicaid might pay, long-term care insurance is something to consider. Consider the cost of care predictions for North Carolina in 2029 from Genworth’s “2019 Cost of Care Survey:”

  • A one-month stay in a nursing home could cost $5,376.
  • The cost of a private room in an assisted living facility could be more than $10,300.
  • Home health care is less expensive, but it still adds up over 30 days to more than $5,000.

Consider your policy options

As you begin planning for retirement look for ways to protect your savings. You may be able to save on premiums if you can buy an LTC policy with a shorter term and a lower daily reimbursement amount. This could free up money for other expenses. There are also hybrid strategies.

One of the most common strategies is a combined long-term care and life insurance policy. If you purchase one of these hybrid policies early but never need long-term care, the policy pays a death benefit when the time comes just like a traditional life insurance policy. If long-term care is needed, the policy will pay for care at that time.

Talk to a financial advisor or insurance representative about purchasing a long-term care policy.

Article provided by Local Government Federal Credit Union.

The advice provided is for informational purposes only.