4 MYTHS of Long Term Care Insurance

Mauricio Rodriguez
Jul 25, 2017 · 3 min read

by: Mauricio Rodriguez, financial advisor.

Chances are about 70% of people will need long-term care sometime after age 65, according to the nonprofit Life and Health Insurance Foundation for Education (LIFE). And it won’t come cheap.

The median cost of a full-time nursing home room is $91,730 per year, according to the Genworth 2016 Cost of Care Survey. The national median hourly rate for a licensed home health aide is $19, which would total $55,480 a year for eight hours a day of care.Statistics like those make long-term care insurance sound like a no-brainer, but misunderstandings still abound.

Here are four myths about long-term care insurance — and the truth.

Myth #1: I don’t have to worry — I’ve got Medicare

Generally, health insurance — including Medicare — pays for hospital and doctor bills but not for custodial care when you have a long-term disability or illness. Custodial care includes help with such daily tasks as eating, getting out of bed, toileting, bathing and remembering to take medications.

Medicaid will pitch in for long-term care expenses- but only after you’ve depleted your assets.

Myth #2: My spouse will take care of me!

Although many people will be able to depend on their spouse, it’s something of which you can’t be sure. What if you outlive your partner? What if you develop Alzheimer’s disease and need around-the-clock supervision? What if you become physically disabled and need more help than your spouse alone can provide?

Myth #3: Everybody should buy long-term care insurance.

For many people, long-term care insurance is simply out of reach. Poor people generally can’t afford the premiums, and the very wealthy may prefer to pay for their care out of pocket. If assets, other than a home, are less than $30,000 for single people and $80,000 for married people, they probably can’t afford long-term care insurance, according to the LIFE organization.

If you have assets to protect, you should consider purchasing long-term care insurance, unless you’ve done a thorough financial analysis and determined that you can self-insure.

Myth #4: The premium will never go up.

No company guarantees premiums on long-term care policies will remain the same. Insurance companies reserve the right to increase premiums through the life of the policy, depending on overall claim costs and investment earnings.

As an financial advisor, I consult with my clients to focus of their financial goals. Many people want their financial portfolio to grow and others want to protect their earnings for the inevitable. My advise is to inform yourself on how to protect your assets. Consult with your financial advisor and ask them if Long Term Care is appropriate for you. If you don’t have an advisor, I would be glad to help.

photo credit: mandycastillo.com

Mauricio Rodriguez

Written by

Helping people grow and protect their assets. Financial Advisor, email: mnrodriguez@nyl.com

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