People are living longer these days. That also means health care cost will not only last longer, but are also increasing each year. The average stay in a nursing home these days is 3 years. It absolutely makes all the sense in the world to purchase long-term care (LTC) insurance if you don’t already. But do most individuals do that? The answer is no, and one of the major reasons is because individuals feel if they never go into a nursing home, that their money has been wasted. We need to change our ways of thinking. If you never get into a car accident, does that mean you wasted your money on car insurance? LTC is insurance to not only protect yourself, but also protect your loved ones financially. According to Genworth’s 2013 Cost of Care Survey, over the past five years, the median annual cost of private nursing home care has jumped 24% from $67,527 to $83,950!
An annuity is a tax deferred vehicle individuals place assets in for safety, protection, and growth. Annuities can be used as a means of securing a steady cash flow for an individual during their retirement years. Annuities can also be used to guarantee a certain fixed rate of return, similar to a certificate of deposit. Until recently, these were really the only ways annuities have been use. As more and more baby boomers are hitting the golden retirement age, we are seeing upgrades to annuities, and what they can offer individuals.
Most insurance carriers that offer annuities, has LTC and nursing home benefits or riders that are either already built into the product, or can be added for a fee. If an individual cannot perform two out of the six activities of daily living (ADL’s), then usually there will be some sort of access to the funds, or even payout to the individual. If an individual spends a number of consecutive days in a hospital, nursing home, or even long-term care facility, there’s usually a benefit where that individual would be able to access funds as well. There are even confinement and terminal illness benefits that are common now on most annuities.
With more and more insurance carriers offering annuities, it’s extremely important for an individual to do their research. It’s not a one size fits all market out there. You’ll find out that there are many different products out there, which seem to be offering the same benefits. I urge you to proceed cautiously. Its situations like this where a local retirement specialist should be contacted in order to find the perfect product that fits your exact needs.