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Long Term Care Insurance Long term care insurance

What is long term care? Quite simply, long term care is when a person receives assistance with activities of daily living for an extended period of time. This care can be provided in many ways, including (but not limited to):

  • Nursing Home
  • Adult Day Care Facility
  • Assisted Living Facility
  • In Home Care

Once a person reaches the age of 65, the odds of receiving long term care are about 60%.1 Although nursing homes have been the traditional method of delivering such care, more and more people are choosing to have the care provided at home. The average age a person will start receiving such care is 79, and most people receive care for 2 to 3 years.2

The costs for long term care varies, based upon the type of care received. Currently in Oregon, a person needing in home care may be charged anywhere from $12 to $38 per hour.3 Nursing home costs average $222 per day.4 These costs are expected to rise at 4.1%.5

There are three ways to pay for long term care:

  1. Medicaid - Depending on your income and assets, help may be available through state and federal programs. These programs have many restrictions and guidelines.
  2. Savings - Paying for these services out-of-pocket may be expensive, but it may unfortunately be your only option.
  3. Long Term Care Insurance - For pennies on the dollar, Long Term Care Insurance offers the most cost effective solution to paying for long term care. You have to apply for such insurance before needing the care. If you qualify, your rates will be determined by your age, health, and desired coverage.

Understanding your need for Long Term Care Insurance is an important part of your financial planning. We encourage you to explore whether Long Term Care Insurance is right for your situation. If it is, you should be confident in the decision your are making, and you should have a solid understanding of the options available. It is wise to shop through multiple carriers to find the most appropriate solution for your needs, and we can help you objectively compare your options. Begin with these resources, and contact us when you are ready to begin!

SOURCES:

1 Kemper et al, "Long-Term Care Over an Uncertain Future: What Can Current Retirees Expect?" Inquiry Vol. 42, Winter 2005/2006, p. 342

2 American Association for Long-Term Care Insurance, "The 2008 Sourcebook for Long-Term Care Information,"

3, 4 MetLife Market Survey of Long-Term Care Costs 2010

5 John Hancock 2011 National Long-Term Care (LTC) Cost Study