Broker Check

Planning Discussions - Long Term Care Insurance

Wealth & Pension Services Group
William Kring, CFP®, AIF - Chief Investment Officer

It May be Time for You to Consider Long Term Care Insurance

Another year has come and gone, and it may be time for you to seriously consider adding long-term care insurance to your arsenal of financial products. There are very few things that can eat into your retirement savings quicker than a debilitating illness.

The National Clearinghouse for Long-Term Care Information ( estimates that nearly 79% of individuals will require some type of some type of long-term care assistance during their lifetimes. At an average annual bill of nearly $80,000 for a semi-private room, it only makes sense to explore purchasing a policy that will offset all or a portion of these expenses if you were faced with this situation.

Here are 3 pertinent facts about long-term care insurance, and some things to think about when considering the purchase of a policy.

Today, people are living longer than ever

At first glance, the ever-increasing life expectancy is a very positive thing. With all of the medicine and medial progress that has come to fruition, people are able to overcome obstacles that would have had dire results only a few decades ago. However, this doesn’t necessarily mean that living longer means living better. A common byproduct of many ailments is having to live with many problems that may result in the need for some type of medical assistance.

That’s where long-term care insurance can help. It can provide you with the means to obtain the type of care that you need without having to break into your financial nest egg. As a result, you can focus more on enjoying your quality of life, as opposed to worrying about scraping enough funds together just to get by.

Long-term care insurance is also for your children or other potential caretakers

Facing a situation where long-term care services are required isn’t necessarily a burden that is carried by the person requiring the care. When elderly parents or relatives become unable to care or provide for themselves, they often turn to close family members to provide the help that they need.

Purchasing long term care insurance minimizes the burden on your children or relatives so they are also able to maintain and enjoy their quality of life. If you have an estate that will be passed to your family, long-term care insurance also protects your family’s inheritance.

Long-term care services are extremely expensive

As previously mentioned, the cost of paying for long-term care services out of your own pocket can become extremely expensive. According to the National Clearinghouse for Long-Term Care Information, the average costs for long-term care services in 2010 were:

  • $205 a day, or over $6,000 a month for nursing home care with a semi-private room

  • $229 a day, or nearly $7,000 a month for a private room

  • Over $3000 a month for care in an assisted living facility

  • $21 per hour for home health aides

  • $67 per day for adult day care services

As such, any retirement savings, or money set aside for legacy planning purposes can quickly be eroded, eliminating your ability to use these funds for their intended purposes. If your condition was prolonged in nature, lack of funding could require you to depend on a state-sponsored home to provide the type of assistance you may need.

As you can see, there are a variety of reasons that you should seriously consider the purchase of a long-term care plan. These polices have continued to evolve over time, and now can include more flexible options such as riders on life insurance with return of premium features. As a result, there are numerous ways for you to obtain the type of long-term care that will be customized to your individual situation and specific needs.

The advisors at Wealth and Pension Services Group have experience with these types of policies, and are willing to help. Please contact us to schedule a free consultation to see how you can incorporate long-term care insurance into your financial plan.