With the more than 70 million baby boomers getting closer their 80s, we’ve been hearing a lot about long-term care in the insurance world. Before we get into whether long-term care insurance is right for you and your family, let’s define long-term care.

Long-term care is hands-on assistance for an extended period of time. It includes home care, adult day care and stays at assisted living and nursing home facilities.

The primary users of long-term care benefits are senior citizens, but the service is available to people of any age. The service is typically for people who cannot take care of themselves, such as those with prolonged disabilities, illnesses and mental impairments such as Alzheimer’s.

Unfortunately, the cost of long-term care can be high. Also, Medicare does not cover it because long-term care is not considered a medical expense. According to Genworth Financial’s long-term care calculator, a private room in a nursing home in the Memphis, Tennessee, area will cost about $74,000 per year out of pocket. Twenty hours a week of home health aid costs more than $35,000 per year.

Because of the high costs of long-term care, we recommend the purchase of long-term care insurance. While insurance premiums can get costly, insurance can be worth the investment. In your 50s and 60s, it’s easy to believe that you’re invincible and you’ll be healthy and active forever. No one wants to admit that 20 years down the road they may end up immobile and frail in a nursing home.

Purchasing long-term care insurance is an important decision to make, and the earlier you decide the better. While long-term care insurance can be worth it (it is called “insurance” for a reason), there are other alternatives we recommend for you to prepare for your future.

  • Save money for it.
    Many Americans choose to invest the money to save just in case the need for long-term care rises. And if they don’t use it, then their children receive a nice bonus in their inheritance.
  • Add on to life insurance or an annuity.
    “Linked-benefit” products are popular, as they add a long-term care rider to a life insurance policy. Annuities can also be combined with a long-term care rider.
  • Purchase an accelerated death benefit.
    A life insurance policy with an accelerated death benefit allows you to get an advance on your death benefit to pay for your extended care. However, the downside may be that an advance can interfere with your eligibility to receive Medicaid.

Several health awareness causes are represented in June, including Men’s Health, Alzheimer’s and Brain Awareness and even Cataract Awareness, so now is a great time to consider options. Paying for long-term care comes with a lot of preparation and decision-making early in your life. The Barnett Group can help you consider the possibilities and alternatives to determine the path that best suits you and your family.


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