Long-Term Care Insurance

Failing to plan for the costs associated with long-term care can wreak havoc on your nest egg. Long-term care insurance can help preserve the assets you've worked so hard to build.

As the baby boomer generation ages, statistics indicate a growing need for long term care. It is estimated that 70% of people who attain age 65 will require long term care at some point in their lives. *1

But the need for long term care is not limited to retirees. Studies reveal that 40% of people receiving long term care services are working age adults, between the ages of 18 and 64. *1 Their need can result from chronic illness, injury or disability.

Many Americans are currently dealing with the emotional and financial impact of providing for the long term care needs of a family member. In home care is often delivered by a relative who may be burdened with both childrearing and elder care responsibilities. And while the services of a home health aide may be enlisted, the approximate average annual cost of home care is $26,000 *2 and the cost is projected to jump to $68,000 by the year 2030. *3

Furthermore, the average annual cost of a semi-private room in a nursing home in 2008 was $69,715 or $191 per day. *4 By 2030, this figure is projected to skyrocket to $190,600.3 With the average nursing home stay estimated at 2.3 years, *5 the total cost may approach nearly a half million dollars!

Will you have saved enough to pay for these types of expenses?
And, even if you did, would you want to spend your savings on long-term care?

Unfortunately, some people believe that their health insurance, Medicare or Medicaid will foot the bill for long-term care. But most health insurance plans normally cover only acute care that is required for a short period of time. Medicare offers limited benefits for those who receive care in a skilled nursing facility following a hospital stay. Generally, Medicare recipients are disabled or have reached full-retirement age as defined by the Social Security Administration. Medicaid is a government program designed to help those in dire financial need. In most cases, almost all of your assets and your spouse's assets must be depleted before benefits will be paid, and even then Medicaid will not cover most home care, which is the setting many people prefer.

That's why many people seek to protect their assets by purchasing long-term care insurance. With long-term care coverage, you may be able to defray the expenses of extended care without placing your income, retirement nest egg and other investments at risk. In addition, long-term care insurance can provide for increased control over your care choices. Insurance can cover expenses associated with care received in a nursing home, assisted living facility, adult care center and at home.

A Legend Group Financial Professional with insurance knowledge can help you define your goals, evaluate your long-term care options and create a plan designed to reflect your needs.

1. U.S. Department of Health and Human Services, Administration on Aging,
"Understanding Long Term Care Basics," October 2008
2. Mature Market Institute, "The MetLife Market Survey of Adult Day Services and Home Care Costs," September 2008. Home care cost is based on a home health aide–$20/hr., 5 hours per day, 5 days per week.
3. Stucki, B. and Mulvey, J., "Can Aging Baby Boomers Avoid the Nursing Home?,"
American Council of Life Insurers, March 2000, page 15.
4. Mature Market Institute, "The MetLife Market Survey of Nursing Home and Assisted Living Costs," October 2008.
5. National Center for Health Statistics, "National Nursing Home Survey," 2004.