A study from the American Association for Long-Term Care Insurance, reveals that few consumers have a plan in place for something that can quickly wipe out a lifetime of retirement savings.
The first step in creating a practical plan is to get past some common myths surrounding long-term care, and to familiarize yourself with the facts – especially when it comes to paying for care.
Myth #1: “The government will take care of me.”
The most common myth is that the government will pay your bills, but Medicare and Medicaid are not resources you can necessarily depend on when it comes to funding long-term care expenses. Medicare is only for people over age 65 and is not intended to cover debilitating disorders that may result in the need for true long-term care beyond 100 days. Medicaid does provide long-term care benefits, but you may have to spend down your savings and assets considerably in order to be eligible, which may make it an unattractive
option if you have a healthy spouse or wish to leave a legacy for your loved ones. And then of course, there is the future of these programs to consider, in light of the ballooning federal deficit.
Myth #2: “I’m already covered.”
Myth number two is that long-term care expenses are covered by your employer’s medical or disability benefits. That simply isn’t the case. Medical benefits are designed to pay for acute medical conditions that you will recover from, like a broken leg or pneumonia. Your disability insurance is meant to replace the income you lose when you can’t work due to illness or accident, without anything extra designated to pay for your care needs.
Myth #3: “My children will take care of me.”
Myth number three is that you don’t have to worry about long-term care costs, because your children will take care of you. This might have been a reasonable assumption years ago, but nowadays your children may live too far away to be able to help or they may have work and child-rearing responsibilities. Loved ones who are willing to assume responsibility for your care, may find that it has a huge impact on their lives and you may not wish to place this kind of burden on them.
A long-term care event can be very manageable if you plan ahead. To get started, you may wish to consider the purchase of long-term care (LTC) insurance. The coverage is designed to pay for care in a variety of settings, from your own home to a nursing home setting. The premiums for the coverage are far less than the amount you would have to pay for your care, should you ever need it.
Many people start considering this insurance coverage in their late forties and early fifties. This is a good idea for a couple of reasons. First, you must be in good health to be accepted for coverage. If you wait to apply and your health changes you may not be able to purchase a policy. Second, LTC premiums are based on your age when you buy the insurance, so the younger you are, the lower your premiums. Once you have a policy in place, if you ever need care, you will be able to help protect your assets, maintain your independence, and receive the kind of care you deserve.
Contact our Benefits team at 800-360-3000 for more information about LTC Planning.