The odds that you, or your spouse, will need long-term care at some point during your lifetime increase dramatically as you age. The cost of that care, should you need it, will likely be considerable. With that in mind, is long-term care insurance something you need? Ultimately, only you can decide whether the benefits of long-term care are worth the cost. It helps, however, to have a better understanding of why you might consider purchasing long-term care insurance, what benefits are usually included, how much it typically costs, and what the alternatives are.
Although a catastrophic accident or illness could result in the need for long-term care at any time in your life, the likelihood of needing care increases with age. By the time you retire you stand about a 50-50 chance of ultimately needing long-term care at some point during your lifetime. By age 85 those odds increase to 3 in 4. Given those odds, it only makes sense to plan accordingly.
The average length of stay in a long-term care facility is 2.5 years. Nationally, the average cost for a year stay in a nursing home is about $85,000. Although the average cost for long-term care in Missouri is below the national average at about $60,000 per year, it is still out of reach for most people if forced to pay out of pocket. That’s why the long-term care insurance business is booming, but is it worth the cost?
Long-term care insurance is not cheap either. Even a relatively young, healthy individual can easily expect to pay over $500 a month for a policy. Keep in mind as well that the policy premiums must be paid every month to keep the policy in force for it to pay out benefits when you actually need long-term care. You could easily pay premiums for 20-30 years without receiving anything in the way of benefits. Pay close attention as well to the actual benefits offered by a plan. Specifically, look at how long you must pay out of pocket before the plan will start paying benefits as well as the maximum daily benefit amount. In addition, look at the maximum time for which a plan will pay out benefits, keeping in mind that you could be in long-term care for several years.
Finally, talk to your estate planning attorney about Medicaid planning. Medicaid will also cover long-term care expenses if you qualify. With careful planning you should be able to protect your hard earned assets and qualify for Medicaid which may make the need for long-term care insurance redundant.
If you have additional questions or concerns about long-term care insurance or Medicaid planning contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.