Concerned about the potential need for long-term care, but confused on where to start? Understanding your options is crucial, and we can help. Let’s discuss the fundamentals of long-term care.
What is Long-Term Care?
According to the National Institute of Aging (NIA), long-term care services are intended to help people live as independently and safely as possible when they can no longer perform everyday activities on their own.1 Long-term care isn’t necessarily medical, but rather a range of services that may be needed to meet health or personal care needs.2 For example, this could include bathing, dressing, eating, and transferring from a bed to chair. Other common long-term care services are implemented within a daily routine to provide support for tasks such as housework, managing finances, grocery shopping, cooking, cleaning, and caring for pets.
A study completed by U.S. Department of Health and Human Services states that more than half of Americans who live to 65 years of age are likely to need long-term care. And the older you are, the greater your chances are of needing assistance. Aside from age, there are other factors that affect the need for long-term care such as gender, current health and disability, living arrangement, and marital status.
- Health: Poor health, in general, increases the likelihood of needing long-term assistance due to risk of disease. Chronic conditions such as hypertension or diabetes typically require long-term care.
- Marital status/living arrangements: Living alone increases the chance of needing long-term care as opposed to being married and/or living with a partner or family member.
- Gender: On average, women outlive men by about five years, which means women have a greater chance of living alone as they age.
- Disability: Accidents, such as falling, could result in a disability necessitating care. There are also chronic illnesses that could cause a disability, such as dementia.
Types of Long-Term Care
Long-term care can be provided at a facility or at home, depending on the situation. At-home care can be provided by a selected family member or a trusted nurse.3 Most at-home services include personal and health support services aimed to help people stay in their homes and achieve a lifestyle that is as independent as possible. Assisted living facilities and nursing homes typically provide 24-hour surveillance and support for those who are not capable of living at their homes. There are also community options that are sometimes referred to as “adult day care” which provide older adults with social and support services, such as planned activities with caregivers.4 This type of facility usually includes transportation, personal care and meals.
Why Planning is Important
On average, seven in 10 individuals over the age of 65 will need some type of long-term care support in their lifetime. That’s a 70% chance. 5 Truth is, your client can’t know for certain if they will need long-term care. But in the unfortunate even of a sudden accident or onset of illness, it is important to have a plan in place for your clients to protect themselves and their nest eggs from the unknown. Planning for the possible need of long-term care can give both your client and their families peace of mind knowing that they will be assisted and taken care of however they choose.6
Knowing the cost of long-term care services is very important when it comes to protecting your client’s nest egg and investments. The cost of long-term care is in part dependent upon where they live, and overall, the rates are rising each year. In 2019, the annual median cost of a private room in a nursing home facility is just over $100,000, and the cost of an in-home-care nurse is close to an average of $90 per visit. 7 Discovering and planning for the total potential cost of long-term care needs can help decide where to pull funds from to make payments, including private financing options such as long-term care insurance.
Long-term care insurance can help cover some of the cost for nursing homes, assisted living, or in-home care expenses that are not covered by Medicare. Unlike traditional long-term care insurance, new hybrid policies can even help provide alternate benefits the event that your client does not need long-term care. Know your options and protect your client, their assets and their families by planning ahead for long-term care.
If you are a financial advisor, please call us at 800.440.1088 for more information.
Sources:
1 https://www.nia.nih.gov/health/what-long-term-care
2 https://longtermcare.acl.gov/the-basics/what-is-long-term-care.html
3 http://www.altcp.org/long-term-care/long-term-care-facilities/
4 https://www.genworth.com/aging-and-you/finances/what-is-long-term-care.html
5 https://www.nia.nih.gov/health/planning-long-term-care
6 https://www.nia.nih.gov/health/planning-long-term-care
7 https://www.genworth.com/aging-and-you/finances/cost-of-care.html
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR USE WITH THE PUBLIC
This article is for informational and educational purposes and is not designed, nor intended, to be applicable to any person’s individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action. The Quantum Group, and its affiliates, have a financial interest in the sale of their products.
The Quantum Group USA, LLC. In CA. d/b/a Quantum Distribution & Insurance Services.
Matt is dedicated to finding multiple ways to help advisors with insurance strategies to augment retirement planning.
