What’s the Plan?: Paying for Long-Term Care

Don Levin, J.D., MPA, CLTC
woman working on laptop with calculator, cash, credit card

“Youth is truly wasted on the young.” How many times have you heard that from a senior client who is no longer able to do the things they had taken for granted so many years before? Whether it’s mowing the lawn, climbing a set of stairs, or threading a needle, it can be difficult to confront our own mortality. Even those who avoid strokes, Alzheimer’s, or other maladies will simply grow older, face an inability to handle the physical aspects of everyday life, and eventually require some assistance. The question is what is their plan for this eventuality?

Read More: Why You Should Work with an LTCI Advocate

How to Pay for Long-Term Care

It’s no secret that long-term care is expensive. After all, it’s one of the top causes of bankruptcy among seniors. In addition to the monetary expense, long-term care can also be costly in terms of the patient’s dignity, the health of the primary caregiver (usually the spouse), as well as the toll it takes on their loved ones. By comparison, long-term care insurance (LTCI) is inexpensive, especially when tax deductions, tax-deferred growth, and other benefits are factored into the equation. To combat the impact of long-term care on one’s personal finances, your clients have four options to choose from.

1. Family Caregivers

The first option that many people readily believe will be available to them is family. Unfortunately, family dynamics have changed over the decades. More women work and have careers, families are smaller, and grown children are often scattered across the country or even around the world. There are fewer and fewer multi-generation households. Plus, the realities of providing unpaid family care are simply unfeasible for many individuals, be it the physical, emotional, financial, or mental toll it can take.

2. Government Benefits

The second option is the government. Medicare and Medicaid do cover long-term care costs in specific scenarios, but most individuals will not automatically qualify and, therefore, should not rely on these benefits. On average, Medicare only covers about 17 days of long-term care. And Medicaid imposes strict asset limitations for applicants and their spouses.

3. Self-Insurance

The third option is self-insurance. Without realizing it, most people are currently self-insured for long-term care. If they don’t already have coverage, they have assumed the primary financial risk for the costs of long-term care. Those who choose this option must hope it doesn’t happen, and if it does, hope their money lasts long enough.

4. Long-Term Care Insurance

The final option is long-term care insurance. Asset protection is essential to financial stability, and most clients have already taken several steps to ensure their financial well-being in the event of a variety of accidents (e.g., life and health insurance, auto insurance, homeowners’ insurance). Purchasing insurance allows us to transfer the risk of unwelcome expenses away from ourselves and our assets. In addition to protecting assets, LTCI can also help your clients maintain their financial freedom and provide them with the options necessary to receive quality care and services.

Read More: How to Avoid an LTCI Decline for Your Client

The single largest cost in waiting to explore long-term care insurance is eligibility for this coverage. While you pay for it with money, you purchase it with your health. Make sure you’re discussing LTCI with your clients before it’s too late.

Not sure where to begin? Schedule a call with one of our in-house advisors to discuss this vital product.

Don Levin, J.D., MPA, CLTC
By Don Levin, J.D., MPA, CLTC | Strategic Relations Director

Don spends much of his time speaking with attorneys and legal professionals about the importance of incorporating LTCI into their practices. Don also writes articles and develops educational materials demonstrating the value of LTCI to professionals and their clients.

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