A majority of the population, as high as 69% of the people turning 65 this year, will need some level of Long Term Care (LTC)and 15% of those people will spend $250,000 or more on those care costs.
Without proper planning, LTC expenses have the potential to significantly impact your life savings or create an excessive financial burden for family members. This is why Navy Mutual will be joining MilSpouse Live to help you establish a LTC plan and enjoy the peace of mind that comes with knowing your financial future is secure.
LTC is provided by skilled nursing services either at home or in a facility devoted to assisting people complete Activities of Daily Living (ADLs). There are six generally acknowledged ADLs; eating, bathing, dressing, toileting, transferring, continence. While health insurance covers immediate medical conditions and ongoing maintenance treatment, very few policies cover prolonged care required for some medical conditions at a residence or nursing home. This care is most often required as a result of a chronic physical condition, illness, disability, or cognitive impairment. As opposed to most medical care, LTC is not designed to cure a medical condition.
There are a few different strategies to prepare for LTC costs, so it is important to consider which would be best for your family and financial situation. We will go into more depth on May 19th with MilSpouse Live, but here are a couple of strategies to consider.
1: One strategy is to plan to self-fund the costs and pay for the cost yourself or ask family members to pay for it.
2: Another option is to purchase a traditional LTC Insurance policy.
Most LTC Insurance policies cover care expenses in the event you are unable to perform two ADLs, or in the event of cognitive impairment. Many of these policies require a premium payment until death or qualified LTC claim and the cost can increase based on losses experienced by the underwriting company. In addition, if the insured died prior to reaching the 90-120 day exclusion period, no benefits would be paid to anyone in exchange for that lifetime of premium payments. The number of insurers offering traditional long-term care policies has also fallen from 125 in the early 1990’s to approximately only 15 today.
3: The most recent strategy used to address LTC costs is through the use of life insurance based products with LTC features.
These life insurance policies have settlement options allowing access to your death benefit in the event you that are unable to perform two ADLs; much like a traditional LTC insurance policy. The benefit of this LTC strategy is the premiums are guaranteed as is the death benefit if LTC is not required.
People with moderate income and assets are most likely to benefit from developing some form of LTC strategy since they have assets to protect but could end up depleting all of their savings if a prolonged care requirement occurs. If your asset level fits this description or if you have questions about developing a LTC plan then please join us on MilSpouse Live on May 19th where Navy Mutual Chief Strategy Officer, Brian Luther will discuss options and considerations of a LTC plan.