Founded in 2001 by the American Association for Long-Term Care Insurance, the goal of Long-Term Care Awareness Month is to shine a light on the importance of planning for the day when you may no longer be able to care for yourself.
Will You Become A Burden To Your Family?
According to LongTermCare.gov, a person reaching their 65th birthday today has a nearly 70% chance of needing long-term care services in the future. Yet the latest statistics estimate only 3% to 4% of people aged 50 and over carry a Long-Term Care (LTC) insurance policy. Though no one wants to become a burden to their family, surveys reveal it’s likely to happen for a majority of Americans:
- 78% of adults getting long-term care at home rely solely on family and friends.
- The average caregiver is a woman around 46 years old.
- On average, the caregiver spends 21 hours per week assisting their family member.
- Over 90% of family caregivers had to change their work schedule in order to provide care.
- Approximately 40% of caregivers had to leave full-time jobs and switch to part-time.
- 29% of family caregivers had to use their own money to provide care.
“As you can see, without LTC Insurance, you may have to tap into your Thrift Savings Plan (TSP) or home equity to cover out-of-pocket costs.”
Out-Of-Pocket Cost Of Long-Term Care (LTC)
Also known as custodial care, neither FEHB nor Medicare will cover non-medical care in a nursing facility or at home. According to the latest statistics published by the World Population Review, the average cost of a private room in a nursing home is around $10,000 per month. Unfortunately, current research indicates that 80% of adults over age 60 do not have the financial resources to cover this expense.
Add to this, according to The Congressional Budget Office, total long-term care expenditures will increase at a rate of 2.6% per year above inflation. As you can see, without LTC Insurance, you may have to tap into your Thrift Savings Plan (TSP) or home equity to cover out-of-pocket costs.
Your Mid-50s Is A Good Time To Buy LTC Insurance
An article published on Yahoo News indicates that the average cost for an LTC insurance policy with an initial value of $165,000 (and 2% inflation growth) is considerably higher at age 65 than at age 55. As you enter your late 50s, you’re at a much higher risk for serious health conditions and, the older you get, the cost of an LTC policy increases. Or, worse, you may be declined for coverage.
To learn more, connect with an FRC® trained advisor.
Source: https://www.nationaldaycalendar.com/november/long-term-care-awareness-month-november
