As the Baby Boomer generation ages, understanding future long-term care options becomes more important. And while it’s not always a popular topic, Brokers have an opportunity to make the evaluation of long-term care coverage less stressful.
Those who are working might not be ready to think about their eventual long-term care needs, but coverage can be crucial, writes Ruth Larkin for BenefitsPro. “Studies have shown that more than 70 percent of people over age 65 will need some long-term care support in their lifetime,” she writes. “Given that the average annual cost of a moderate home care claim is $50,000 and the average annual nursing facility claim is $90,000, it is clear that LTC can have a major impact on anyone’s retirement plan.”
Brokers and employers can provide crucial support, Larkin writes. “Repositioning group LTC insurance as part of an overall wellness program (health and wealth) makes sense. One way to think about it is as 401(k) insurance and lifestyle protection coverage,” she writes.
Group coverage offers significant discounts and is the same cost for both men and women, “which is a particularly favorable advantage for female employees, who can obtain coverage for 35 percent to 40 percent less than would be available by purchasing an individual policy,” Larkin writes. Group coverage is also portable. “Additionally, LTC coverage gives employees a sense of control over their future health-care choices and has the potential to relieve family members of the responsibility to provide long-term care,” she writes.
More options exist for those who don’t have long-term care coverage but need related financial tools. These include life insurance or annuities with provisions for long-term care and short-term care insurance. Those who need some coverage are increasingly buying the latter, writes Karen Demasters for Financial Advisor. Policies are easier to qualify for than long-term care coverage and can be less expensive.
“Short-term care insurance policies generally provide coverage for up to 360 days and can pay for home care assistance, assisted living and skilled nursing home care costs,” she writes. “The average cost for a short-term care policy in 2015 was $1,043, a 5.3 percent increase over the previous year, but still far short of the cost of a long-term care policy.”
It’s a hard topic, but can make all the difference to one’s financial health, writes Carolyn Rosenblatt for Forbes. “The sudden costs can overwhelm all but the most financially secure,” she writes. “Parents are unprepared and their adult children become uncomfortable with the prospect of having to help support their aging loved ones.” Brokers and financial advisers can provide crucial guidance for those discussing long-term care.