5 Important Truths You Need to Know About Long-Term Care Insurance

Many people think they can’t afford long-term care insurance – or if they don’t need it, they’re just throwing money out the window. I want to shed some light on these myths and let you know 5 important truths about long-term care insurance.

1. MYTH: I don’t plan to go into a nursing home, so long-term care insurance won’t help me.

TRUTH: Long-term care insurance is not just for nursing home coverage. It also pays for long-term personal care services in a variety of settings – including your home.

2. MYTH: I’m pretty healthy, so I doubt I’ll even need long-term care.

TRUTH: Someone turning 65 years old today has a nearly 70% chance of needing long-term care service and support at some point, according to the Administration on Aging. While the administration says 1/3 of today’s 65-year-olds may never need long-term care support, 20% will need it for longer than five years.

3. MYTH: Medicare and Medicaid will cover my long-term care expenses.

TRUTH: Medicare generally only covers up to 100 days in a nursing home, the administration says, and Medicaid doesn’t come into play until you’ve exhausted your own resources. While Medicaid does pay for some long-term care services, there are income and eligibility requirements to qualify.

4. MYTH: There’s no way I can afford long-term care insurance.

TRUTH: There are policy options – such as annuities or life insurance wrapped with a long-term care benefit – where you do not lose your principal if you don’t spend it. Instead, it can be passed on to your beneficiaries. Additionally, there is some flexibility in how you could make payments. Instead of a lump sum, you could pay annually or monthly over 5-20 years, depending on the coverage you want.

For example, a 50-year-old female non-smoker might pay $1,000 a month for 10 years, but on day one of her policy, she’ll receive up to $470,000 in benefits, and by the time she might need to use it, her policy will be worth over $1 million in benefits. There are also less expensive options, if someone wants less coverage. We can help you figure out what makes sense for your situation.

Yes, long-term care insurance can be expensive, but long-term care is expensive. The latest figures from the administration state long-term care in the U.S. costs an average $225 a day or $6,844 per month for a semiprivate room in a nursing home, $119 a day or $3,628 per month for care in a 1-bedroom unit in an assisted living facility, and $20.50 an hour for a health aide.

5. MYTH: I’m too young to have to worry about long-term care insurance.

TRUTH: We typically recommend most people take out a long-term care policy around age 47. The younger you are, the cheaper the policies are going to be and the more benefits you’ll have when you get older. Also, similar to life insurance, once you have a medical issue, it can be difficult to get long-term care insurance.

The bottom line is long-term care insurance helps protect your assets, so you can leave enough for your spouse to live comfortably or have more to pass on to your children.

I’d love to help you figure out whether long-term care insurance is right for you – and what the best policy might be for your situation. Contact me to set up an appointment.

Paula Swanson, CRC®

Bell Investments - VP/Wealth Advisor

Main: 701-298-1500

Direct: 701-451-3031

paula.swanson@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Bell Bank and Bell Investments are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using the name Bell Investments, and may also be employees of Bell Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Bell Bank or Bell Investments. Securities and insurance offered through LPL or its affiliates are: