Surveys show most people over age 40 understand the need to plan for future long-term care costs. This is a family issue which impacts all generations of family members. However, many people avoid pursuing adding a Long-Term Care Insurance policy because they think it is too expensive.
The fact is, for most people, Long-Term Care Insurance can be a very affordable way to address the financial costs and burdens of aging. These policies are custom designed and the director of the American Association for Long-Term Care Insurance (AALTCI) says there can be smarter ways to purchase these very important policies.
“By smarter, I mean saving money and having some insurance protection in place because some protection is always going to be better than having none,” says Jesse Slome, Director of the AALTCI, a national consumer advocacy and education group.
There are several ways to design a plan to fit almost any budget. Slome says one way to is with inflation protection. Normally, a person would purchase 3% compound inflation. This means your benefits increase each year, not your premium, by 3%.
Slome recommends considering using 2% instead of 3%.
“Inflation’s been tame for the past decade and of course no one can predict the future but even if you have to supplement future care costs from your Social security or retirement assets, that’s going to be doable. And, if inflation increases, well then so typically does the value of your assets and the income one earns from CDs and bonds,” Slome explained.
Keep in mind some states require 3% compound inflation in order to qualify for their Long-Term Care Partnership Program. The program provides consumers who own a partnership certified policy additional dollar-for-dollar asset protection. Click here to read a story about the partnership program.
Another option Slome mentions are shared spousal benefits which many companies offer.
“This is an incredible benefit not offered by every insurance company but for a couple, I think it’s the best-kept secret today,” Slome said.
“With the shared care option, if one spouse exhausts their benefits, they can tap or access the benefits available in the other spouse’s benefit pool. That’s an incredible planning tool for couples, “he said.
This allows a consumer to purchase two smaller plans and connect them. This can provide outstanding value at a lower cost.
“Many of my clients select shared benefit options. They see an incredible value in both the lower cost and the asset protection provided by these plans,” said Brent Donarski, a 30-year veteran specialist in long-term care planning runs www.myltcspecialist.com.
“My clients are usually very surprised how affordable today’s Long-Term Care Insurance really is. They know they don’t want the responsibility of caregiving to be placed on their children. They desire to protect their savings and lifestyle while knowing they will have the resources for their choice of quality care when they need it. When they see how affordable LTC insurance really is it becomes a common-sense decision to get it in place,” Donarski said.
American families are benefiting from these insurance policies. In 2018, over $10.3 Billion were paid in Long-Term Care Insurance benefits. Thusly, families had the resources to pay for quality care at home or in a facility without having to drain savings or force family members to be caregivers.
Slome says every insurance company has their own pricing and specific policy features.
“This is a case where you really benefit from working with a knowledgeable specialist, someone appointed with multiple long-term care insurance companies,” he advises.
Since these plans are custom designed your first research should be the cost of care in your state or the state you expect to live once you retire. The LTC NEWS MAP will show you the current cost of long-term care services. It will also indicate available tax incentives and the availability of partnership plans. Find your state by clicking here.
You can find a qualified Long-Term Care Insurance specialist by clicking here.
Most experts suggest purchasing a policy prior to retirement when you enjoy better health. Premiums are based, in part, by your age at application, the amount of benefits you wish to have and your health. Several types of policies are available in most states. These include traditional policies (including those which are partnership certified), asset-based policies which offer death benefits, and short-duration plans.
The issue of long-term care planning is really about family. The need for extended care can impact multiple generations at the same time. Family caregivers are impacted physically, emotionally and even financially. Planning with Long-Term Care Insurance will make getting older easier on those you love.