As a Certified Financial Planner with a Certificate in Geriatric Care Management, I work with clients to achieve multiple financial goals, including helping them save, invest, and grow their assets so they can retire comfortably. It is a safe assumption that amongst your investment accounts, you own a 401k or IRA, that you will eventually use to fund retirement dreams such as traveling and spending time with your family. We might also assume that another one of your goals is to leave part of your estate to a spouse, children and/or grandchildren. (Most of my clients have used inherited assets to fund part of a down payment on their first apartment or house.) This means that you never want to drain your assets even if you become one of the 70% of Americans requiring Long-Term Care Services between the age of 65 and death.
Below you will learn why it is so important to ask yourself: How can I plan in advance to protect my retirement assets and estate legacy if I require expensive Long-Term Care Services? How can I preserve my assets for my healthy spouse if I require care? How can I assure that I can leave an estate legacy for my family? The answers are to accumulate significant savings and income generating assets that can pay for Long-Term Care Services or procure a Traditional Long-Term Care or a Hybrid Long-Term Care-Life Insurance Policy. Below you will learn how a single Hybrid Policy can protect both retirement and estate planning goals.
Don’t assume that Medicare will pay much for long-term care services as Medicare benefits are limited. Also, don’t assume that Long-Term Care Insurance is too expensive or doesn’t payout.
As a provider of Insurance Policies and Long-Term Care Services, I have schooled myself in the quality policy options on the market today and can help you choose the best policy for you. I have submitted policy claims to multiple carriers with good claims experience.
You’ve worked hard for years to save for retirement. What are the odds of requiring paid Long-Term Care Services that could deplete your retirement savings?
The U.S. Department of Health and Human Resources states that approximately 70% of people turning 65 today will require paid long-term care services. https://www.hhs.gov/aging/long-term-care/index.html
This means that you would need assistance with at least two ADLs (activities of daily living) such as bathing, dressing, eating, toileting, and transferring. It can also mean that you would require full-time assistance due to a cognitive impairment like Alzheimer’s. Assistance could occur at home or in an assisted living or nursing home facility.
You now know that when you turn 65, you have a 70% chance of requiring paid Long-Term Care Services. What might these Services cost?
I am a Certified Financial Planner with a Certificate in Geriatric Care Management. I have a clear understanding of available long-term care services, their cost, and what services long-term care insurance will pay for.
According to the U.S. Department of Health and Human Resources’ Administration on Aging, the average woman needs long-term care services for 3.7 years, and the average man for 2.2 years.
In the NYC metro area, 3 years of 24/7 home aides provided by an agency can cost almost $500,000.*
*Source: Care Concierge NY
The NY State Department of Finance reports that the average cost of a stay at a nursing home in Long Island is $390 a day or approximately $124,000 a year and $375,000 over three years.
Care in a Alzheimer facility in the NYC Metro area can cost $250,000 a year.* Healthline reports that that Stages 3 and 4 of Alzheimer’s, Moderate Decline and Moderate Severe Decline, stages typically requiring significant on-hands care, together on average last 3.5 Years at a cost of more than $750,000 million if housed in a specialized facility. My own mom has received full-time homecare for more than 10-years due to her dementia. Her Long-Term Care Policy has paid for more than $1 million of her caregivers’ salaries.
Source: *New Jewish Home, Riverdale, Bronx, NY
Will Medicare pay for your Long-Term Care at age 65? Unfortunately, Medicare provides very limited Long-Term Care benefits.
Most health insurers, including Medicare, generally do not pay for custodial care or non-skilled assistance with Activities of Daily Living (ADLs), which make up the majority of long-term care services, whether at home or in a nursing facility. You or your children will have to pay out of pocket for long-term care services that are not covered by private life/long-term care insurance or public assistance. Plan and save early.
What does Long-Term Care Insurance cover?
Long-term Care Policies and Hybrid Long-Term Care-Life Insurance Policies typically cover the cost of homecare, plus the cost of assisted living, nursing home, and Alzheimer’s facilities. If homecare coverage is purchased, make sure your policy covers independent aides versus agency aides, so you can save money. Since the benefits provided by Long-Term Care (LTC) Insurance Policies and Life Insurance Policy Long-Term Care Riders can vary, I can help you choose the most appropriate policy for you.
A Hybrid Long-Term Care-Life Insurance Policy: Your multi-faceted solution to preserve your Retirement Savings & Estate Legacy
A single Hybrid Policy can offer flexibility by providing both a Long-Term Care Benefit and Death Benefit. Some Hybrid Policies also offer a surrender option where you can get part of or your entire premium back.
A Life Insurance Policy with a Long-Term Care Rider typically allows the insured to use some of the Life Insurance Death Benefit to pay for Long-Term Care Expenses while still alive. The annual premium for a Life Insurance Policy with a Long-Term Care Rider is typically lower than paying annual premiums for two separate policies. Clients from ages 25 and up whose priority is Life Insurance typically purchase this type of Hybrid Policy.
A new and improved flexible solution is a Hybrid LTC-Life Insurance “cash indemnity” Policy where you pay a one-time lump-sum premium. “Cash “indemnity” means that while on claim the insurance company sends you a check. You don’t have to submit caregiver timesheets or receipts to get reimbursed as required by most Traditional Long-Term Care Policies. These policies also payout a death benefit assuming you haven’t used the full long-term care benefit.
Another benefit is the option to surrender (a return of partial or full premium) the policy if you decide you no longer need Long-Term Care Insurance. Clients who expect to build enough wealth where they can self-insure or pay for their own care during retirement find the surrender or return of premium option attractive. The annual premiums for Traditional Long-Term Care Policies fall into the “use it or lose it” category like auto and homeowners insurance premiums. You typically cannot get your premiums returned if you surrender a Traditional Policy.
Clients from ages 40 to 65 whose priority is Long-Term Care Insurance typically purchase this type of Hybrid Policy.
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For the past 19 years of helped clients’ build their retirement investments. It is certainly encouraging when a client has both savings and proper insurance to fund a long-term care need enabling him or her to receive proper care, plus preserve assets and an estate legacy for a healthy spouse, children and grandchildren.
Which insurance option is right for you? What about your parents? Please call or email us for an appointment 917-715-2233.
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