Should I Get Long Term Care?
Should I Get Long Term Care?
Not everyone needs long term care, but it is important to look at why you may need it in the future and the costs associated with it.
Who Needs Long Term Care?
Women live longer than men by about five years, so they are more likely to live alone at the end of their lives. With age comes a greater need for long term care. Having an accident or chronic illness can lead to a need for long term care. A majority of people over age 90 have a disability. Chronic conditions, poor diet, a lack of exercise, and a family history of chronic illness can all increase your likelihood of needing long term care. If you live alone, you will also be more likely to need assistance later in life. Consider your situation to help gauge your future needs.
Two-thirds of people who are 65 today have a chance of needing long term care services in their lifetime. Women who need care will need services for 3.7 years on average and men who need care need services for 2.2 years.
Consider the Cost of Long Term Care
Long term care can be expensive, which is why most people stay in their homes as long as possible. The help of a caregiver can be vital in these later years to assist in your activities of daily living (ADL). If you do not have a friend or family member willing to serve as your caregiver free of charge, you will need the assistance of a home health aide from a trusted home care agency. These visits will cost upward of $20 per hour, with the median annual cost upward of $50,000. The median cost for a private nursing home room was $8,517 per month in 2019.
Medicare does not cover long term care unless you need skilled services or rehabilitative care. Medicaid covers long term care, but you must meet income, ADL needs, and eligibility requirements. The average annual long term care insurance premium for a healthy 55-year-old couple was $3,050 in 2020. The average age of people buying long term care insurance is 60 years old.
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Long Term Care Riders and Accelerated Death Benefits
If you decide you want coverage and already have life insurance, you can add a rider for long term care or accelerated death benefits onto your existing life insurance policy. Accelerated death benefits give you a tax-free advance on your death benefit to use for medical care during your lifetime. You can qualify to receive your accelerated death benefit if you have a need for long term care services for an extended period of time or are confined to a nursing home and are incapable of performing activities of daily living (ADL).
The monthly amount you can use toward your nursing home is capped at 2% of your death benefit. The amount toward home health care is half that. Any money that you receive as an accelerated benefit is subtracted from the death benefit you leave to your beneficiaries. These benefits are often more limited than if you have a long term care insurance policy.
Contact Texas Medicare Advisors today to learn more about long term care.