Long-Term Care Is HOW MUCH?!

As a Daily Money Manager, I’ve seen many of our clients benefit from having a long-term care (LTC) insurance policy in place. It helps them ease the cost of a home care aide, an assisted living apartment, or nursing home care.

Yet, I still meet Baby Boomers that think…

…”I won’t need that insurance…”

…”It’s too expensive…”

…”I’m healthy as a horse and when I go, I’ll just drop dead…”

…”Once I retire, my health insurance expenses will go down…”

Most people have no idea how much long-term care can costs and according to a government study, “Almost 70% of people turning age 65 will need long-term care at some point in their lives.” (70%!!!)

Ugh! I asked a networking colleague of mine to do a guest blog post for me and tackle this issue.

Meet Eric Burkard, an independent life insurance agent specializing in Long Term Care insurance.

So Eric…do healthy people really pay less for health care in retirement?

Not so, according to the 2016 Retirement Health Care Costs Data Report published by Healthview Services.

“Healthy Americans can expect to pay significantly more for retirement medical services than those suffering from a chronic disease that may impact their lifespans. A healthy male or female can expect to pay almost twice as much for lifetime health care in retirement than someone who is diabetic.”

One of the main findings of the report shows that “the average healthy 65-year-old couple retiring this year is projected to spend $288,400 in today’s dollars on lifetime Medicare Parts B, D and supplemental insurance (Plan F) premiums. When dental, hearing, vision and all other out-of-pocket expenses are included, the total retirement health care bill rises to $377,412.

But here’s the kicker. Long-term care expenses are not factored into these cost estimates and can easily equal or double the above numbers.

Long-term care is assistance with Activities of Daily Living, or ADL’s such as bathing, grooming, dressing, eating, etc, due to chronic illness. However, it is not paid for by Medicare or Medicare Supplement let alone regular health insurance.

These expenses are paid mostly from retirement savings and income and often by family members. When these funds run out Medicaid (not Medicare) assistance may be available–but with strings attached. Veterans who served in war times may also have some limited assistance to pay for long-term care, but again, with strings attached.

The only insurance that specifically pays for these expenses is Long Term Care Insurance, and this insurance can be stand-alone or combined with life insurance.

A good candidate for this type of insurance is someone who …

  • Is healthy and expects to live a long life
  • can afford the premiums
  • is a planner, not a predictor

IMPORTANT: Planning for long-term care does not mean you plan for it to happen. It means you hope it never will, but if it does, you will have a viable plan to pay for it.

To get a handle on the cost of long-term care in your area, check out Genworth Cost of Care Survey.

Eric Burkard is an independent life insurance agent specializing in Long Term Care funding solutions including hybrid Life/LTC insurance policies and represents the top carriers in the industry and across the country. He can be contacted at 770-777-5988 or eric@burkardinsurance.com.