What is the definition of long-term care?
Long-term care is an umbrella term for support-based services intended to help individuals with certain impairments function normally and healthily in their homes and communities. You qualify for long-term care if you have trouble managing one of the following six essentials on your own (and will continue to struggle with these things for at least the next ninety days):
- bathing
- dressing
- eating
- toileting
- moving in or out of bed/chair
- continence
Note that having a severe cognitive impairment like Alzheimer’s or dementia would also qualify you for long-term care. The National Association of Insurance Commissioners has put this definition in place nationwide, so as long as you live in the U.S., the same terms will apply.
Do people generally think about their future long-term care needs?
According to our in-house specialist, Paul Manginelli, “they may not discuss it with family, friends, or agents… but yes…” People are aware of and worried about their ability to function as they age. As advancements in healthcare and personal wellness continue to be made, more and more people have outlived and will outlive their retirement savings. This scenario is an extremely nerve-wracking thought: “If I need care, who’s going to care for me, and how am I going to pay for it?”
How can someone prepare for their long-term care needs?
Whatever plan you choose to have in place, “preparation is key,” says Paul. One thing a person can do is calculate the foreseeable cost of the care they could need and then spend some time trying to figure out where they’d like that money to come from. Some people may choose to use the money they’ve shored up in an investment account or purchase a stand-alone long-term care policy to cover the cost. Others may buy a life insurance policy with living benefits, such as an IUL. The IUL is a policy that provides you with care and death benefits as well as accumulates cash value. Any policy with cash value may be sold for a lump sum, and that sum could be put toward care expenses.
What is the typical cost?
The cost of long-term care is strictly dependent on the individual and what policy/policies they have. The best time to buy long-term care is between the ages of 45-65, but it’s good to keep in mind that the younger a person is when they purchase insurance, the less expensive the premiums will be. Generally, “consumers should not be paying more than 7-10% of their income” for long-term care insurance.
Remember, if you need extended care or believe you will need it in the future, it’s crucial to be open about these needs with your loved ones and trusted insurance agent. Together, a holistic plan can be made for your future that keeps everyone satisfied, safe, and financially stable.
Life Insurance Questions?
We hope that this information on long-term care has been useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
Get affordable life insurance quotes by clicking here.
See our other websites:
This article was revised on 08/06/24.