With the holidays quickly approaching, many of us turn our thoughts to spending time with our loved ones. Perhaps this makes it even more appropriate that November is when we recognize Long-Term Care Awareness Month. Long-Term Care (LTC) coverage is an integral part of a client’s financial well-being – after all, statistics show that over 70% of people turning age 65 this year will need LTC services at some point in their lives, for about three years on average. However, LTC services go beyond medical care and nursing care to include all the assistance one could need if they ever have a chronic illness or disability that leaves them unable to care for themselves for an extended period of time. Clients can receive LTC in a nursing home, assisted-living facility, or in their own home. Though older people use the most long-term care services, a young or middle-aged person who has been in an accident or suffered a debilitating illness might also need long-term care. (Ahip.org) For instance, having a chronic illness such as high blood pressure or diabetes increases one’s chances of needing LTC services at some point in their lives. LTC isn’t just for the elderly – in fact, clients between the ages of 40 and 50 have an 8% chance of needing LTC services due to some form of disability! (longtermcare.gov)
Let’s take a look at some LTC facts:
- In the year 2000, almost 10 million people needed some form of LTC in the United States. Of this population, 3.6 million (37%) were under age 65 and 6 million (63%) were over age 65 (Roger & Komisar, 2003).
- Over 90% of Americans have not discussed LTC with spouses, parents, or children.
- About 80% of care at home is provided by unpaid caregivers and may include an array of emotional, financial, nursing, social, homemaking, and other services. On average, caregivers spend 20 hours a week giving care. More than half (58%) have intensive care-giving responsibilities that may include assisting with a personal care activity, such as bathing or feeding. (longtermcare.gov)
Some average costs for LTC in the United States (in 2010) were:
- $205 per day or $6,235 per month for a semi-private room in a nursing home
- $229 per day or $6,965 per month for a private room in a nursing home
- $3,293 per month for care in an assisted living facility (for a one-bedroom unit)
- $21 per hour for a home health aide
- $19 per hour for homemaker services
- $67 per day for services in an adult day health care center
The cost of LTC depends on the type and duration of care you need, the provider you use, and where you live. Costs can be affected by certain factors, such as:
- Time of day. Home health and home care services, provided in two-to-four-hour blocks of time referred to as “visits,” are generally more expensive in the evening, on weekends, and on holidays.
- Extra charges for services provided beyond the basic room, food and housekeeping charges at facilities, although some may have “all inclusive” fees.
Variable rates in some community programs, such as adult day service, are provided at a per-day rate, but can be more based on extra events and activities. (longtermcare.gov)
These points illustrate exactly why LTC planning is so important, as these needs can place considerable emotional and physical strain on loved ones and family members. Having a viable LTC plan in place also protects clients from having to draw down other retirement assets to pay for these costs, or worse, having to rely on family members to pay these costs for them. It is never too early to start planning for LTC costs – especially for women. Since women statistically live longer than men do, they make up a much larger percentage of LTC recipients. The majority of nursing home residents with Alzheimer’s or some other form of dementia are women as well. (www.aaltci.org)
Traditional objections center around the question “Why pay for a policy that I may never use?” Linked life/LTC products can be an ideal solution to this – not only do many of them offer a return of premium benefit, but will also pay out a life insurance death benefit, whether the LTC benefits are used or not. Several linked life/LTC contracts also offer single and flexible pay options, to better accommodate clients of different financial means.
Regardless of which LTC option your clients choose, the important thing is that they choose something – as we’ve shown, no retirement plan is complete without including LTC coverage. With a solid LTC plan in place, your clients can remain in control of their retirement, no matter what comes their way. Whether you are new to LTC or have been selling it for years, your Zenith Marketing Sales Team can help you open the door to more LTC sales – give us a call today.