Long Term Care Insurance

By Aaron Maguire

The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people 65 and older.* 

As we look to the future, did you know that long-term care expenses can deplete resources 2–3 times faster than intended?1 There are a few misconceptions about long-term care shared by many:

●        It won’t happen to me.

●        Medicare and Medicaid have me covered.

●        That’s what my savings are for.

●        My family will be able to take care of me.

 As healthcare costs continue to rise, it’s important to understand how you’ll pay for long-term care (LTC), and put a plan in place as early as possible to help ensure you won’t outlive your income. While projected long-term care sounds like a king’s ransom to most of us, the earlier you plan, the longer your assets have for potential growth to help outpace inflation. And if you’re considering long-term care insurance, the younger you are when you purchase a plan, the less costly the premiums.

For many retirees, Long-Term Care (LTC) insurance can offer a helpful safety net for protecting retirement income in the event of a serious illness or incapacitation. Clients often have concerns when it comes time to plan, like not qualifying for a traditional Long-Term Care insurance policy due to age, a chronic illness or other factors. Some are reluctant to pay for covered custodial services that may never be used.

For these reasons and more, options for LTC planning have become more flexible in recent years. While it’s critical to factor long-term care and rising healthcare expenses into your overall retirement income plan, there are alternatives to traditional LTC policies, including life insurance and annuity products with LTC riders. Another strategy involves swapping an older Life Insurance policy that has accumulated a large cash value for a hybrid policy that would offer a death benefit and LTC benefits. If benefits aren’t used for care, the policy eventually will pay a death benefit.

Aaron Maguire is a Financial Consultant with Security National Financial Services.

Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFGIS Insurance Agency), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Advisory services are only offered by Investment Adviser Representatives. Investments are: Not FDIC/NCUSIF insured, May lose value, Not financial institution guaranteed, Not a deposit, Not insured by any federal government agency.

*[ AARP. Beyond 50.2003: A Report to the Nation on Independent Living and Disability, 2003, (11 Jan 2005). ]