Is it time to think about
long-term care insurance?
For many Americans, obtaining long-term care insurance may not be at the top of the list when it comes to their retirement planning. But with an aging population that now includes the Baby Boomer generation, long-term care insurance is becoming more attractive for its financial benefits and the relief it provides family members and friends who would otherwise have to provide this care.
Last year, about 40 million Americans provided care to an elderly spouse, family member, neighbor or friend, according to the American Association of Long Term Care Insurance. About 56% of these providers were women. The association noted that caring for a family member is physically and mentally draining on the care providers, who may also experience negative effects on their health and family life.
What is long-term care insurance?
A long-term care insurance policy provides individuals with financial benefits that will pay for their care when they need help performing their daily activities. These benefits are usually paid out for a pre-determined number of years, with lifetime or unlimited benefits policies now becoming harder to find because of the rising costs of care. The insurance generally allows policy holders to receive care via nursing facilities, assisted living centers, hospices and home health care services.
According to the Genworth 2012 Cost of Care Survey, the national median rate for a private room in a nursing home is $222 a day, while a bedroom in an assisted living facility is $3,300 a month. Adult day care centers cost about $61 a day, while home health aide services are about $19 an hour. The survey also reported that Americans can expect to pay about $15,330 more per year today for a nursing home than they had to pay in 2007, a 4.28% increase.
Some 8.1 million Americans currently have long-term care insurance protection, with about 330,000 people purchasing these policies in 2011. The rising cost for this type of care and the impact the uninsured may have on family members is prompting more people to take a look at long term care policies.
American Association of Long Term Care Insurance
Insurance products offered through LPL Financial or its licensed affiliates. The investment products sold through LPL Financial are not insured Travis Credit Union deposits and are not NCUA insured. These products are not obligations of Travis Credit Union and are not endorsed, recommended or guaranteed by Travis Credit Union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.
The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
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