What’s the Scoop on Long Term Care Insurance?

Let’s face it. If you’re in your 40’s or 50’s, it’s likely that the last thing you want to think about is planning for the possibility of needing long term care. Yet, some key findings of a survey done in 2013 by the Associated Press and the Non-partisan and Objective Research Organization (NORC) at the University of Chicago included the following statistics:

• Two of every three Americans who reach age 65 will at some point need long-term care for up to three years. Yet the majority of those age 40 and older have done “little or no planning” for how they might pay for long-term care when they get older and
• Most people underestimate the cost of nursing home care (it averages $6,700 a month) and overestimate what Medicare will cover.

“As a primary care doctor, I see my patients struggle with how the cost of age-related care affects their lives and their financial realities. Long-term care costs are huge. We can’t afford not to think about them,” says Dr. Mary Pickett of Harvard Medical School.

What Medicare DOESN’T cover

Healthline.com has published the following list:

• most dental care
• eye exams
• hearing aids
• acupuncture
• cosmetic surgeries
• long-term care

In fact, USAA.com states that: “Medicare does not cover any type of long-term care, whether in nursing homes, assisted living facilities or people’s own homes. Medicare does, however, provide coverage for short-term stays in skilled nursing facilities — which are, very often, in nursing homes.”

According to the Association of Long-Term Care Planning, the current average cost of nursing home care in New Jersey is around $10,000 a month. And it’s not much different in places around the country.

These are just some of the reasons that we, at the Employee Benefits Advisors Group, LLC, an insurance company specializing in long term care and health insurance are adamant about employers and individuals getting educated about and possibly purchasing long term care insurance starting at a reasonably young age. “Nothing worse than being stuck on a fixed income and you need long-term care without having planned for it. This can bankrupt you.” says Patti Goldfarb, owner of the EBA Group.

Long Term Care Insurance

So, it seems that for most people, long-term care insurance might be essential for protecting their estates and their families. Just like life insurance, long term care insurance monthly premiums are cheaper when you’re younger. Granted, you’d probably be paying premiums longer than you would if you purchased it at an older age, but there are two potential things wrong with waiting until old age to purchase insurance:

• You never know, really, when a tragedy will strike. Goldfarb says, “People don’t understand what happens at the end of your life. You don’t generally find out until last minute. Family members don’t generally understand that their loved one won’t be coming out of the hospital or if they do come out of the hospital, they might need long term care.”
• People often think that they will be able to save enough money, that they will have job security, or that they depend on a certain income from Social Security. But life and finances aren’t that certain for most people. If people are fortunate enough to save money for their retirement, most of the time, without insurance, the savings isn’t enough if long term care is in the picture. And, Medicaid will only kick in when the estate’s assets are entirely drained.

Ms. Goldfarb will often recommend that her clients get a hybrid life and long-term care insurance policy. She lists popular carriers of this type of insurance as:

• Nationwide
• One American
• Lincoln
• MoneyGuard
• Securian

Married Couple Discount

Many people get overwhelmed when they think of paying their bills and living expenses even with a decent income AND shelling out money for life OR long-term care insurance. Again, it’s a difficult subject to think about. However, according to Goldfarb, there is good news for married couples. There’s a 30% discount for couples going in on long term care insurance plans together.

“Long term care insurance is a gift for your kids. Kids don’t have to take care of you. Nobody wants that for their children. Plus, premiums for long term care insurance may be cheaper than you think and there are a lot of options out there.” she says.

Employee Benefits Advisors Group, LLC works with small and mid-sized employers, associations, chambers of commerce, as well as individuals and families, including seniors.  Their affiliated specialists are recognized experts in the fields of financial planning, risk management, human resources, accounting and, employment law.  They are involved in their respective areas and serve on boards of major industry associations such as the National Association of Health Underwriters and the Society of Human Resource Managers.