The need to cover Long Term Care is a discussion that comes up daily in our business. How to do it, should we do it, how much is the cost, is it worth it and so on and so on. If you are looking into LTC coverage, your a bit limited to the companies that are currently offering this particular brand of insurance as it is not known to be a BIG seller.
There are ways you can use your retirement plans to help offset this cost IF it arises. That’s the thing with LTC, the IF factor. We aren’t all destined to need home care, or assisted living, or adult day cares. So why go out and pay the monthly premiums? Same reason you have car insurance or life insurance or homeowners insurance. You can also use an annuity with LTC benefits and riders on them to offset the costs if that need arises.
Bloomberg has a slide show that speaks to the real cost of LTC. I’ll give you a few snippets. For the entire article, please click the Bloomberg link.
According to medicare.gov, 9 million Americans over the age of 65 are receiving long-term care of some kind this year. That number will swell to 12 million by 2020. Costs are also rising. A 65-year-old couple retiring this year would need $240,000 to cover just medical expenses in retirement, up 4 percent from 2011, according to a study by Fidelity.
$450 billion: Estimated value of caregiving by family and friends in 2009 (based on 42.1 million caregivers at 18.4 hours of care per week at an average cost of $11.16 per hour) — AARP
$2,207: Average annual premium in 2007 for all kinds of long-term care insurance, covering almost five years of benefits — U.S. Department of Health and Human Services
$20,800: Average annual cost for one year of home health aide(4 hours per day, 5 days per week) — MetLife Market Survey
Assisted Living Costs - $41,000: National annual average base rate (at $3,550 per month) — MetLife Market Survey
$88,000: Average privately paid cost of a nursing home in 2012 — AARP (In 10 states, the annual price exceeded $100,000.)