Long Term Care Insurance

At a time when many American baby boomers are headed into retirement, Long Term Care (LTC) Insurance is a tool that provides a safety net for what lies ahead. According to the U.S. Department of Health and Human Services, approximately 70% of people who live to age 65 will need some kind of LTC. That’s because as we age Activities of Daily Living (ADL’s) may become difficult or impossible to perform due to illness, injury or aging. LTC insurance can bridge the gap between what an individual has in their budget to pay towards the cost of care and what the care actually costs. When you consider that just over 40% of the population will need long term care prior to age 65 due to illness or injury, it is easy to understand why this type of insurance has become more a part of conversations between individuals and their insurance agents.

Costs of Long Term Care

Based on data collected during 2011 by Life PlansInc. of Waltham, MA, the monthly cost of long term care in a private facility in Anchorage averages $5,239, and hourly home health care costs $26 per hour. Can you or your family cover those costs? If not, it’s time to look into this insurance product. Purchasing the product while still in your fifties will reduce the price and increase the likelihood of acceptance by the insurance company. For example, if you purchase LTC insurance for 2 individuals with a shared-care rider, the average annual premium at age of purchase could run $2,675 at age 55, $3,395 at age 60, or $4,660 at age 65.

Which product will be right for me?

This is where the staff at DFA become a valuable asset. Once you have provided us with basic information about what you are looking for, we will provide you with an analysis of products that fit your needs. Just remember to get started on this right away! Many people erroneously believe that Medicare or Medicaid will help them when LTC is necessary. However, if you are eligible for Medicare (for most of us it’s after age 65) they will only pay up to 100 days of care in a skilled nursing facility IN YOUR LIFETIME.  Medicaid coverage is based on eligibility (based on income and assets) and is very limited. If you have the means, plan to take care of this part of your life.

Who provides this insurance?

Currently, we work with John Hancock and Berkshire Life. Both are strong organizations with a long history of being financially sound.