Long-term care insurance

Specialized care when you need it

Most people don’t accurately plan for long-term care as one of their major retirement expenses. We not only help you protect your assets from being depleted, we also help you potentially relieve the pressure on family members to provide your care.

Our integrated wealth planning approach takes into account your entire financial situation when recommending long-term care options. When you work with a dedicated financial advisor, you'll have a team of specialists, including insurance professionals working on your behalf.

Know your odds.

Earlier in life, many people don’t realize the odds that they will require specialized care later in life. In fact, the U.S. Department of Health and Human Services estimates that people who reach age 65 have a 70% chance of requiring long-term care services.

Without long-term care insurance, specialized care, such as a nursing home, assisted living or in-home care, may be one of your greatest costs. More than just providing for your care and protecting your retirement savings, long-term care insurance can help protect your estate from being depleted.

Long-term care costs

Some form of coverage is important because the cost of specialized care is dramatic. In-home health care can cost as much as $45,000 per year for the daily services of a health aide. The national average for full-time nursing home care is $80,000 per year and could rise to as much as $250,000 by 2050.

Medicare may provide skilled care for up to 100 days, but only after you have spent most of your assets. If you must rely on Medicaid to pay for care, you may have little control over how it is delivered.

Stand-alone policies

Stand-alone, comprehensive coverage policies strive to cover all long-term care services. They are similar to health insurance policies, trying to cover as many different care alternatives as possible. You typically pay for these policies throughout the life of the insured with regularly scheduled premium payments. You may also choose to pay for the policy in full after 20 years, 10 years or one year of payments.

Life insurance options

 

Life insurance riders

Another way to purchase long-term care insurance is by adding a rider to a permanent life insurance policy. The policy represents two separate coverages and your premium is split up to pay for both.

A long-term care rider typically pays benefits when the insured is not able to perform two out of six basic Activities of Daily Living (ADLs). Activities of Daily Living include: eating, bathing, getting dressed, toileting, transferring and continence.

A long-term care rider should not be confused with an "accelerated death benefit" which is a popular feature of many life insurance policies. Accelerated death benefits pay part of the death benefit for terminal illness or doctor-certified, terminal, long-term care confinement while the insured is alive. Since very little long-term care could be certified as terminal, this policy feature is a poor substitute for long-term care insurance.

Hybrid policies

Still another way to purchase long-term care insurance is through an "either/or" feature in life insurance. If you need long-term care, you receive stipulated benefits. If you receive all the benefits before death, the policy expires. If not, after your death, your beneficiaries receive any remaining benefits.

An advantage of this type of insurance is a guaranteed benefit since everyone eventually dies. You can purchase this type of policy with periodic premiums for the life of the policy or with a single premium of $50,000 or more.

A disadvantage of this type of insurance is that, because the policy needs to cover the morbidity risk of long-term insurance as well as the mortality risk of death, the premiums are much higher than an equivalent stand-alone, long-term care insurance policy.

Another disadvantage is that underwriting standards for life insurance are more strict than standards for long-term care insurance. Many who qualify for long-term care insurance are denied coverage for life insurance.

Connect with one of our dedicated Wealth Management professionals to discuss how we can help you plan for the future.

Insights

 

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