Hello again. I’m David Hovis, financial advisor at Hovis & Associates. The topic I want to discuss today is a heavy one: Long Term Care.
Did you know that 70% of 65+ year-olds will require some type of Long Term Care during their lifetime? And the average nursing home stay ends up costing between $225,000 and $250,000.
That’s a large risk many people haven’t planned for.
So, what are your options when it comes to addressing your long term care needs?
Option 1: HAVE A FAMILY MEMBER PROVIDE THE CARE
Option 2: SPEND DOWN MOST OF YOUR ASSETS AND THEN HAVE MEDICAID PAY FOR LONG TERM CARE
OPTION 3: SAVE UP ENOUGH MONEY TO SELF PAY FOR CARE
AND OPTION 4: BUY LONG TERM CARE INSURANCE POLICY
All of these can be good options, but today we will focus on Option 4 and why you might want to consider buying a Long Term Care Insurance policy.
Long Term Care is not something that most of us want to think about or frankly plan for. We usually have Long Term Care conversations with our clients after they have seen the reality of dealing with providing long term care for their parents or a spouse and the devastating effects it can have on the family, both EMOTIONALLY and FINANCIALLY. Providing long term care for a family member will always be emotionally difficult, but by planning ahead you can relieve some of the financial burden.
A lot of us wonder if spending money on a long term care insurance policy really makes sense.
I can only tell you my personal situation and let you be the judge. My Mom passed away recently from Alzheimer’s Disease and needed Long Term Care for several years before her passing.
I can tell you, FOR US, having a long term care Insurance policy for her was one of the best decisions we ever made. Let me give you some actual numbers from our personal experience, so you can see why.
The total Cost for my Mom’s long term care was $260,000 – between home health aids coming to the house for a few years and her residing in a Memory Care Facility for the last 2 years, the total cost was just over $260,000.
Now, Long Term Care Insurance is not meant to cover all these costs. The objective of long term care Insurance is to HELP pay for care and, more importantly,
PROTECT YOUR LIFE SAVINGS. But by having a long term care insurance policy in place we were able to cover a very large portion of this cost. We purchased a traditional long term care insurance policy back in 2001. Over the years, those premiums did go up and we ended up paying just over $12,000. So, in my Mom’s case, the policy that we paid $12,000 for, ended up paying out over $217,000 in Long Term Care benefits.
Without a long term care insurance policy, the Cost of Care becomes the overriding factor. By having this policy, we could focus on finding the best fit for my Mom – WHICH TO ME WAS THE BIGGEST BENEFIT OF ALL.
So, there are lots of options when it comes to planning for Long Term Care and everyone’s situation is different, but if you would like to discuss your long term care options, feel free to give us a call at Hovis & Associates or visit our website at hovisandassociates.com or check us out on Facebook, LinkedIn, Twitter and YouTube.