Why Long-Term Care Insurance is Worth Having

Let's start with the most echoed statement on the web: Americans are living longer but aren't necessarily healthier, leading to health problems later in life. The U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point. And that care comes with a cost: Long-term care costs range from $19,500 per year for adult day care to $102,200 per year for a private room in a nursing home.

Beyond costs, what other arguments circulate regarding buying long-term care insurance?

• It can protect your assets. Medicare caps payments for skilled care at 100 days and only pays after meeting specific requirements. Medicaid only kicks in after you spend down your own assets. Private health insurance only pays for doctor and hospital bills. If you plan on any of these options, you'll most likely spend most of your own money to pay for care, depleting your hard-earned savings.
• It can take the pressure off your family. Becoming a caregiver is physically, emotionally, and often financially burdensome. Many people, even family members, aren't able to make such a huge sacrifice. This is especially true when the caregiver is a spouse or partner also facing their own aging health issues.
• It can provide you with care options. Long-term care insurance gives you flexible options when it comes to deciding where to receive care. Many facilities don't accept Medicaid, so your options may be limited to a no-frills nursing home with shared rooms rather than a more amenity-oriented private nursing home where you'd be more comfortable.
• It may come with life insurance protection. Many policies are hybrid policies bundling long-term care coverage with life insurance coverage (or an annuity). This type of policy offers financial protection should you pass away while also giving you the knowledge in knowing that your long-term care needs are covered.

There are three main options when it comes to LTC coverage.

• Traditional long-term care insurance: Also known as standalone long-term care insurance (LTCi), traditional policies exclusively cover long-term care expenses in your home or a facility.
• Hybrid long-term care insurance: Also known as linked benefits or asset based LTC policies, they pair long-term care with life insurance or an annuity. A hybrid policy provides coverage for both extended care in your home or a facility along with a death benefit. If you never need long-term care, your loved ones benefit from a life insurance payout after you die.
• Life insurance with a long-term care rider: Some life insurance policies let you add additional coverage for long-term care via a rider. A rider lets you use some of the life insurance policy's death benefit to pay for long-term care needs while you're still alive. Note that this option could impact the death benefit amount.

The right policy for you depends on your goals and circumstances, but how do you decide? Below are some questions to ask yourself before asking your financial professional for more in-depth information.

• Which type of coverage is most important to you?
• How do you want to pay your premiums?
• Do you want the option of locking in your premium?
• How is your health?
• What are the tax advantages?

Still have questions surrounding long-term care options? As your dedicated team, we can help you find the right choice for your situation. Reach out to us at (704) 216-2260, and we'll provide you the information you need to make better-informed decisions.

Adapted from LifeHappens LTC & LifeHappens Careful Planning & LifeHappens LTC Options

This is meant for educational purposes only and should not be considered investment advice or a recommendation to take a particular course of action. Consult with a financial professional regarding your personal situation before making any financial decisions. Please be sure to discuss unique tax situations with a CPA or qualified tax professional.