At the start of 2022, you may be thinking you’re one year closer to retirement or the need for long-term care. Planning for these later stages of your life career is becoming more important.
As you approach these pivotal moments, concerns about the financial impact of long-term care might be weighing on your mind. The rising costs associated with healthcare, assisted living, and nursing homes can be daunting, potentially threatening the nest egg you’ve worked so hard to build. This financial strain can cause anxiety, especially when you consider the unpredictability of your future health needs.
Insurance can play a crucial role in alleviating these worries.
What will tomorrow bring? None of us know for sure, but insurance can provide peace of mind by offering some assurance against unforeseen life events. Public programs like Medicare and Medicaid only cover specific circumstances. For instance, Medicare doesn’t cover non-skilled assistance with daily living activities like bathing. Medicare covers long-term care for skilled services or rehabilitation, but only in a nursing home setting and for a maximum of 100 days.
Medicaid pays for a significant portion of long-term care services, but income must fall below a specific level to qualify. To lessen the financial burden on family members or yourself, long-term care insurance can help cover essential daily living activities in various settings. It can also prevent retirement savings from being depleted. According to the National Care Planning Council, the average stay in a nursing home is 835 days. Even a small policy can provide significant relief during a short hospital stay or cover a few hours daily with an in-home health aide.
Many long-term care insurance policies require medical underwriting, so coverage may not be an option for those in poor health or already receiving long-term care services. Policies may also have limits on how long or how much they pay. Costs increase with age and health concerns. Women, having longer life expectancies and a greater likelihood of filing claims, often pay more for coverage than men.
Additionally, long-term care policies often include an elimination period (30, 60, or 90 days), during which you pay for care before the policy begins to pay out. And as with all insurance, there’s always the chance you may not use the policy at all.
Carefully consider your personal financial situation and potential long-term health needs when deciding on long-term care insurance. Policies are non-standardized, offering flexibility in tailoring coverage to your unique circumstances. However, comparing policies requires more than just price considerations. Key factors include the amount of benefits provided, deductible periods, inflation adjustments, and the degree of medical underwriting required.
Are you puzzling through retirement finances and related considerations? The Alpine Bank Wealth Management team may be able to help.
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