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Why Long-Term Care Insurance Is Needed

Long-term care insurance (LTCI) protects you against the catastrophic cost of long-term medical care. Although it is possible that some people might never need long-term care, advancing age is the greatest predictor of the need for long-term care. For example, age-related disabling mental and physical conditions affect 20% of those over 65. This figure jumps to 50% for those over 85.

In addition, 40% of people age 65 will enter a nursing home, and 10% of those will stay at least five years.

Surprisingly, women are twice as likely to need long-term care than men after age 65. Why? Because women live longer.

Care can be very expensive, depending on the level of care you need. Average cost of one year in a nursing home is now $80,000, and a private one-bedroom in an assisted-living facility averages $30,000-$40,000 a year.

Medicare Does Not Pay For Long Term Care

It has only limited coverage for a nursing home following a hospital stay. Medicaid, which pays almost half of all nursing-home costs, is only for lower-income Americans. You must be impoverished or have to impoverish yourself to qualify (known as “Spend-Down).

The State of Florida does have a Medicaid option called a public-private partnership in which the amount of any long-term care policy can be exempted from the amount you need to spend down to qualify for Medicaid.

Cost of LTC insurance varies widely, depending on your age, physical and mental condition, amount of daily benefits, duration of coverage, and the amount of the deductible (called the “elimination period”).

Stand-Alone LTC Policy or Life / Annuity with Long-Term Care Rider

For years, there were only three types of LTC policies: Individual, joint with a spouse, and group policies through an employer. Today, more insurance companies offer hybrid policies: either a life-insurance policy with a rider for LTC coverage, or an annuity with a long-term care feature.

Many people object to buying an LTC policy because they think they are paying for
coverage they may never need. These hybrid policies answer that objection: they offer cash value and a death benefit for their heirs, but also offer LTC coverage if it’s needed. Further, an annuity can be structured to pay the premiums of the long-term care coverage.

We represent the nation’s top life companies and LTC insurers. We can tailor a policy to fit your exact needs.

Call us now for a free quote – 954-552-1283