Long Term Care Insurance Costs And Benefits Review
The Real Cost of Long Term Care
The aging of America is costly on the emotions of the elderly and their families. In addition to this emotional cost, long term care costs strongly affect the wallets of American families. According to national long term care statistics, almost 10 million Americans need long term care services. Thirty seven percent of those are under the age of 65 and that number is expected grow to 12 million by the year 2020.
Long term care costs are also rising. A recent Fidelity Investments study indicates that a couple retiring at age 65 in 2015 will need $240,000 just to cover their medical expenses in retirement. This is a 4 percent increase over their last study.
Looking at unpaid long term care costs of caregiving provided by friends and family gives a more realistic look at long term care costs. According to AARP estimates, unpaid caregiving provided in 2009 totaled $450 billion worth of long term care costs.
Long Term Care Costs
Genworth Financial and other insurance carriers like John Hancock Life Insurance Company conduct extensive annual surveys on long term care costs. Here are some of their findings from their most recent 2017 study: A private room in a nursing home now costs $97,455 per year and in 16 states the cost exceeds $100,000. The average for an Assisted Living Facility is $45,000 and for a Home Health Aide it’s $49,192 per year.
Long Term Care Insurance
By 2010 only about 9 million Americans were protected with long term care insurance. Some people cannot qualify based on health conditions, some are too old to qualify, others simply have not planned ahead or perhaps they are planning to pay long term care costs out of pocket. Others may not have assets to protect or cannot afford the premiums. According to the U.S Department of Health and Human Services, the average annual premium for long term care insurance, covering almost 5 years of benefits is $2,207.
Long Term Care Planning
For Americans with at least $250,000 of assets, it’s critical to plan ahead for long term care costs. Have the conversation while you’re in good health and ideally in advance of retirement. What’s the best age to purchase long term care insurance? Many financial advisers recommend obtaining coverage while in your late 40s or 50s. Planning early makes sense because long term care insurance is more affordable at younger ages. It’s also much more likely a person can health qualify for long term care insurance. While many health conditions are insurable, many more will disqualify a person from buying protection at any price.