If you ask me, long-term care insurance is about as cringeworthy a topic as life insurance. Who wants to think about aging and regressing to a state where you need to be cared for 24/7? However, it’s worth a moment of discomfort as you muse what life might look like for you and your family if you don’t consider LTC insurance.
On average, a year of full-time care costs almost $60,000. After discovering you have no LTC insurance, your son or daughter decides to move you into his or her basement. You haven’t lost all your faculties, so you are acutely aware of the musky odor and odd noises. Because your family doesn’t want to leave you home alone and can’t afford to hire someone, they enlist the help of the garish, outspoken neighbor, Babs, who loves having someone to talk to while she watches her soaps. Your body may be failing you a bit, but your mind is not and you can’t bare her incessant chatter and patronizing nature. Each night as you fall asleep on your damp, basement cot, you dream about how your life might be different if you had purchased LTC insurance instead of that mid-life crisis Corvette.
A sort of hybrid between life and health insurance, LTC insurance enables your family to pay for any care you need. Your LTC insurance might cover your rent at an assisted living facility, the fee for adult day care or the expenses if a family member becomes your full-time caregiver. It will guarantee you a comfortable environment free of obnoxious neighbors and clammy basements.
Consider a few statistics courtesy of the Insurance Information Institute.
–11 percent of the individuals who applied for LTC insurance in their 50s, 19 percent in their 60s and 43 percent in their 70s were rejected.
–In 1999, about 160,000 of the people living in nursing homes were under age 65 (almost 10 percent of the total). Of those receiving home health care services, roughly 400,000 were under 65 (about 30 percent of the total).
–According to a report from the Kaiser Foundation, over five million people ages 18-64 need some type of long-term care in their lifetime.
If you expect to qualify for Medicaid by the time you’re 65, you should not purchase LTC insurance. The government program will subsidize the cost of care. Conversely, if your net worth is above 1.5 million, excluding your home, you can safely forego the LTC insurance as well.
But since the middle class makes up nearly 50 percent of the population, chances are you fall in between those two extremes, and might want to consider LTC insurance so your children or siblings aren’t saddled with the financial burden.