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The youngest of the baby boomers are just a few short years from turning 65. However, the ongoing changes and the obvious struggles of the ones who retired before them have left the younger boomers hesitant to take the step.
Perhaps, one of the biggest concerns on their minds right now is long term care.
As you may know, the current state of health and long term care threaten financial stability and even the family dynamics of many American families. One look at the costs of long term care will show you just how scary retiring has become. This leaves many of the younger ones thinking:
“Should I get long term care insurance to cover the costs of care?”
The Impact of Long Term Care Insurance Policies
In our previous blog post, we highlighted these policies as one of the effective long term care strategies to improve and secure your future.
Let’s take it one step further by exploring the top 10 reasons to get long term care insurance.
Bonus: Check out this infographic we created to make all the facts and tidbits easier to find.
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1. To Protect Assets
We all know that the primary goal of long term care insurance is to help fund long term care expenses. It helps policyholders manage the costs more effectively by adapting to the inflation rates.
However, these policies do more than that.
Did you know that long term care insurance plans also help keep your assets and savings remain intact? Here’s how it works:
According to the Government Accountability Office, the average retirement savings of Americans between the ages of 55 and 64 are roughly around $107,000. While this may seem like a lot, keep in mind that the average monthly cost of staying in a nursing home (private room) is already $8,365. This means an entire year in a nursing home could equate to $100,379!
However, with long term care insurance, you get to save a big portion of your savings and assets from going straight to long term care expenses.
2. To Relieve Burden on Family
Here’s the reality: Family caregiving is both a rewarding and strenuous responsibility to have on your shoulders.
On the one hand, this provides a good opportunity to give back years of love and support your aging loved ones showered you with through the years. It also allows family members to mend broken bridges, and strengthen bonds. After all, caregiving may be one of the greatest acts of love.
It can be a fulfilling role to fill. If you take a look at this video by AARP, you get to see just how dedicated family caregivers are:
On the other hand, caregiving can go the other way. Family caregiving can create rifts in relationships and build resentment. Moreover, the responsibility can be so great that it changes the caregiver’s life drastically.
How? You may ask.
As older adults begin to realize that their finances are not enough to cover their care needs, they often turn to their family members for the support.
This means physical, mental, social, and financial support—some of which many family caregivers are not prepared to give. As stated in the infographic above, many have had to make adjustments, such as cutting back on work hours and taking leaves of absence, in their employment just to accommodate the care demands.
In fact, around 78% of family caregivers are paying for an average of $6,954 out-of-pocket costs as a result of family caregiving. Some have had to put their careers on hold to become full-time family caregivers. Often, they are not compensated for this service.
To sum it up, caregiving is a worthwhile opportunity. However, we cannot deny the negative effects it can have on our loved ones. If there is a way to protect them from these instances, shouldn’t we take it?
Related: How to Ease Financial Burden of Caregiving to Women
3. To Help Women Pay for Care for an Extended Period of Time
It’s essential for women to plan for long term care since they get the short end of the stick compared to men.
How?
Living longer is supposed to be a good thing, right? You get to spend more time with your children and grandchildren or pursue your lifelong dream. But for women, they are haunted by the negative effects of longevity – they live longer than men.
This means that women are at risk of needing long term care for an extended period of time, which is known to be costly. On average, women would need long term care for 3.7 years while men would only need 2.2 years.
Read: Who Needs Long Term Care?
Since they outlive their spouses, they have to face long term care alone and with limited funds since the couple’s retirement funds were already used up for the husband’s care needs.
With a long term care policy in place, they don’t have to dip into their limited resources, which gives them better chances to weather the storm.
4. To Have More Liberty of Choosing the Care and the Provider
Long term care insurance policies are uniquely crafted to fit the needs of each policyholder.
This means that you get to control the type of care you receive in the future. You decide which features, riders, and other options are included in your plans.
One such feature that can help immensely despite chances of increasing your premiums is the inflation rider that comes in three types: simple inflation, compound inflation, and future purchase/guarantee purchase option. These riders increase your daily benefit to keep up with the cost of long term care.
One of the main issues with receiving care from family caregivers is that their finances do not get replenished after the spend thousands of dollars on out-of-pocket costs related to caregiving. Through this feature, policyholders can use their benefits the way they choose to because they do not need to provide the receipts. This means that they can use the policy to pay the services of their family caregivers.
5. To Stay at Home
As cited in a 2016 report by HomeAdvisor, 61% of homeowners age 55 and older shared that they plan on staying in their current homes as they grow older. As this may be a cheaper alternative to moving to a facility, more and more older adults are becoming keen to the idea of aging in place.
However, if you take a step back and examine the costs, this option can also take a big chunk of your finances.
Long term care insurance can help support costs. Policies may cover various therapies such as physical, rehabilitation, occupational, and other types. Coverage may also include skilled nursing care, personal assistance, and some domestic services.
On top of that, long term care policies may cover home modifications.
6. To Enjoy Peace of Mind
No one wants to spend the supposed golden years worrying about the looming threat of long term care costs. After all, we hear so many stories of older adults living our worst fears.
Having comprehensive coverage for long term care helps ease if not completely remove these worries from our minds. It provides the peace of mind in knowing that industry experts are managing your finances and ensuring that it can keep up with the rising costs.
7. To Have a Plan for the Future
As indicated in the infographic, one-third of the respondents to the AP-NORC Center’s 2016 long term care poll have confessed that they have done no planning for their own future care needs.
On top of that, 35 million out of the 76 million baby boomers still have no retirement savings today.
As you can imagine, this paints a grim picture of the next generation of retirees. Having no set plan for the future can easily lead to disastrous outcomes. To help you get started planning, answer this short long term care quiz.
By securing a policy, you do not just create a fund for long term care. You are also taking active measures to secure your future.
Read Next: Long Term Care Planning Guide
8. To Maintain Independence
We have discussed the negative effects of long term care on caregivers. However, the setup also poses risks to the well-being of care recipients.
Never underestimate the emotional toll that comes from being completely dependent on another person, especially when you realize that you could have done something to prevent it.
By having an insurance policy for long term care, you get to enjoy the golden years the way we choose to.
Related: 15 Insider Tips for Independent Senior Living
9. To Age Alone Safely
Just having the thought of aging alone is scary. But what’s more frightening is that more people become at risk of aging alone.
If you take a look at the figures in the infographic, you will see that cases of divorce have doubled and around 22.60% of baby boomers who don’t have anyone who would take care of them as they age.
If you don’t have anyone to take care of you in the future, your policy can help you age alone safely.
Read: 5 Strategies for Growing Old and Alone that Actually Work
10. To Preserve Quality of Life
Many of us saw retirement as the time to travel to exotic places and explore forgotten passions. No one really imagined that this time would be taken over by stress and anxiety from dealing with long term care expenses.
Policies can help us keep the dream alive. By having a separate fund solely dedicated to long term care, we get to use our other resources to fund some of the leisure activities we have previously planned.
However, just keep in mind that the other retirement expenses must also be covered.
Should I Get Insurance for Long Term Care?
The truth is that many are still hesitant in getting coverage for long term care. Many see it as an unnecessary cost because there is still a chance that they might not need it. However, we’d like to ask one question about this:
Do you purchase car insurance and wish that you get into a car crash?
The answer is no, right? The same goes for long term care policies.
Moreover, we would like to highlight that 90% of policyholders have shared that they are satisfied with the coverage that their policies provide. 89% have shared that they did not have to purchase additional services not covered by their care.
At the end of the day, this is what many of us want, right?
If you wish to learn more about coverage, please feel free to request free long term care insurance quotes from ALTCP. We can help you save time and money by shopping the market for you and give you estimate premiums from top carriers. This way, you get to see what your options are with zero commitment to purchase from us.
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