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When you think about your plans for retirement, a nice place to live, traveling, playing golf and leaving an inheritance for loved ones may all be part of your plan. Sounds lovely. But what will happen to your plan if you become unable to care for yourself due to an illness, accident or maybe just the effects of getting older? You’ll need some type of long-term care, and that won’t come cheap.
“The reality is that 60 percent of Americans who reach age 65 will someday need long-term care services and in many parts of this country, these services can cost more than living in a five-star hotel," said David F. Woods, CLU, ChFC, president of the LIFE Foundation. “People need to learn more about long-term care insurance and understand the chance they’re taking by not insuring themselves against the risk of one day needing assistance with the tasks of daily living. Delaying or avoiding the decision to buy a long-term care insurance policy can mean the difference between living your retirement years on your own terms or facing some very difficult financial realities.”
To encourage people to evaluate their long term care insurance needs, the nonprofit LIFE Foundation urges Americans to avoid five common excuses people give for putting off a long-term care insurance purchase. As with any insurance decision, LIFE advises that consumers meet with an agent to learn more.
Excuse #1 - I can’t afford it
This is the most common reason given for not owning long term care insurance. Yet according to LIMRA International, a market research organization, people who have never shopped for policies overestimate the cost by as much as five to 10 times. Start evaluating coverage options when you first start thinking seriously about retirement, which experts say should be in your 40s or early 50s at the latest.
Excuse #2 - I won't need it
According to the Centers for Medicare and Medicaid Services, about 10 million people of all ages already need help with the basic tasks of daily living, and that number is projected to increase sharply as the population continues to age. “Aging can be a steep emotional hurdle to face, however people need to recognize that today's long-term care environment isn’t the same as what their grandparents experienced,” said LIFE Board Member Deb Newman, CLU, ChFC, LTCP, President of Newman Long Term Care. “Most people will need long-term care and there are wonderful care options today, but only to those with the means to pay for them and that’s where long-term care insurance can be so essential.”
Excuse #3 - My health insurance, Medicare or Medicaid coverage will pay for my care
Don’t count on it! Health insurance only pays for doctor and hospital bills and maybe your prescription costs. Medicare only covers short-term rehabilitative care that you receive after being hospitalized for at least three days. Medicaid, on the other hand, does pay for long-term care services but will only pay for care if you have very limited assets and meet federal poverty guidelines. Moreover, having Medicaid pay for your care also means you may not have much of a say in choosing the facility that will provide your care.
Excuse #4 - My family will take care of me
Family members are often the first line of defense for loved ones who need long-term care services, but this is often not a permanent or wise solution. “Most people don’t want to depend on their loved ones to care for them for the long-term," said Newman. “Those in the ‘sandwich generation’ especially, who are currently taking care of both their aging parents and their growing children, know the emotional and financial burden caring for loved ones can bring. People should take steps now to make sure that when the time comes, not all the responsibility of caring for them will fall on the shoulders of their children or siblings.”
Excuse #5 - The buying process is too complicated
Long-term care policies do have a multitude of options and features, which is why it is important to seek assistance from a qualified insurance professional who specializes in these products.
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