According to a 2021 AARP Home and Community Preferences Survey, 77% of adults age 50 and older want to remain in their homes as long as they’re physically able. However, other recent studies indicate pre-retirees have not planned for covering the cost of non-medical, custodial care they’ll likely need in the future — at home or in a facility.
Can You Afford The Cost Of In-Home Care If You’ll Need It?
Research indicates someone turning 65 today has a near 70% chance of needing some type of LTC services in the future. This would include assistance with everyday activities like grooming, dressing and preparing meals at home. A 2023 survey conducted by The Kaiser Family Foundation reveals that approximately 83% of respondents said it would be difficult to pay an estimated $60,000 out-of-pocket for one year of in-home care assistance.
“Then again, since different policies cover different types of in-home care services, it’s important to read the fine print.”
You Can Buy LTC Insurance That Covers In-Home Care
The American Association for Long-Term Care Insurance reports that around 7.6 million individuals currently receive care at home. The cost of services through an agency average $14 to $28 per hour at about 20 hours per week. Fortunately, you can purchase LTC insurance that specifically includes the cost of in-home care. Then again, since different policies cover different types of in-home care services, it’s important to read the fine print.
Pay Attention To When LTC Insurance Pays Benefits
Usually, certain physical and mental conditions are required before LTC insurance coverage kicks in. Benefits are triggered when you’re unable to perform everyday activities that are specified in the policy. Other factors you need to consider before you make a decision:
- Duration Of Benefits: a policy can cover LTC costs for a year to as many as five years.
- Insurance Waiting Period: the waiting period is much like an insurance deductible that factors into the cost of your premium.
- Maximum Policy Benefit: the total dollar cap your LTC policy will pay when you begin using benefits; it can last longer depending on the type and cost of your care.
- Inflation Protection: insurance companies usually offer options to add inflation protection when you purchase your policy and at periodic intervals.
If you’re among the growing number of pre-retirees who plan to stay in their home as they age, it’s important to consider buying LTC insurance to cover the cost of in-home care. Meet with an FRC® trained advisor to learn more.
