What should you know about long-term care?
Edward Jones - Chad Choate, AAMS
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Apr 04, 2024
Florida - Sarasota, Bradenton & Charlotte Counties
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We all
hope to remain healthy and independent throughout our lives – but life can be
unpredictable. If you were ever to need some type of long-term care, would you
be financially prepared?
Long-term
care encompasses everything from the services of a home health aide to a stay
in an assisted living facility to a long residence in a nursing home. You may
never need any of these kinds of care, but the odds aren’t necessarily in your
favor: Someone turning age 65 today has almost a 70% chance of needing some
type of long-term care services and support in their remaining years, according
to the U.S. Department of Health and Human Services.
And
all types of long-term care can involve considerable financial expense. The
median annual cost for a home health aide’s services is more than $60,000 per
year, and it’s more than $100,000 per year for a private room in a nursing
home, according to Genworth, an insurance company. Furthermore, contrary to
many people’s expectations, Medicare usually pays very little of these costs.
Of course, some people
expect their family will be able to take care of their long-term care needs. But
this may not be a viable strategy. For one thing, your family members simply
may not have the skills needed to give you the type of care you may require. Also, by the time you might need help, your
grown children or other family members might not live in your area.
So, you may need to protect
yourself and your loved ones from the potential costs of long-term care.
Basically, you’ve got two main choices: You could self-insure or you could transfer
the risk by purchasing some type of long-term care insurance.
If you have considerable
financial resources, you might find self-insuring to be attractive, rather than
choosing insurance and paying policy premiums. You may wish to keep an emergency savings or
investment account that’s earmarked exclusively for long-term care to help
avoid relying on your other retirement accounts. But self-insuring has two main
drawbacks. First, because long-term care
can be costly, you might need to plan for a significant amount. And second, it
will be quite hard to predict exactly how much money you’ll need, because so
many variables are involved – your age when you start needing care, interest rates
or inflation, the cost of care in your area, the type of care you’ll require, the
length of time you’ll need care, and so on.
As an alternative to
self-insuring, you could purchase long-term care insurance, which can provide benefits
for home health care, adult day care and assisted living and nursing home
facilities. However, you will need to consider the issues attached to
long-term care insurance. For one thing, it can be expensive, though the
younger you are when you buy your policy, the more affordable it may be. Also,
long-term care policies typically require you to wait a certain amount of time
before benefits are paid. But policies vary greatly in what they offer, so, if
you are thinking of buying this insurance, you’ll want to review options and
compare benefits and costs.
In any case, by being aware of
the potential need for long-term care, its cost and the ways of paying for it,
you’ll be able to make the appropriate decisions for your financial situation,
your needs and your loved ones.
Chad Choate III, AAMS
828 3rd Avenue West
Bradenton,
FL 34205
Edward Jones is a
licensed insurance producer in all states and Washington, D.C., through Edward
D. Jones & Co., L.P. and in California, New Mexico and Massachusetts
through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones
Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of
Massachusetts, L.L.C. California Insurance License OC24309
This article was
written by Edward Jones for use by your local Edward Jones Financial Advisor.
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