It’s easy to think of long-term care as someone else’s eventual problem, but the harsh reality is that 70% of Americans over the age of 65 end up needing some form of long-term care in their lives. That doesn’t always mean a two-year stay in a nursing home; It could mean a few months of home health care, or a stint in an assisted living facility that promotes independence. But either way, the cost of long-term care can be downright surprising for those who aren’t ready for it. And unfortunately, a lot of older Americans may be on that same ship.
An estimated 48% of Americans ages 55 to 64 are unfamiliar with long-term care insurance, according to the Center for Safe Retirement® and Bankers Life. And that means these same people could miss out on a key opportunity to make an otherwise frightening expense much more manageable.
Image source: Getty Images.
How much does long-term care cost?
The amount you need to spend on long-term care will depend on several factors:
- Where you live
- The kind of care you need
- The length of time you need care.
Unfortunately, Medicare generally won’t pay for long-term care, especially when it comes to assisting with everyday life. (If you need a trained nurse to come to your home to administer medications after surgery or injury, that may be a different story.)
Fortunately, long-term care insurance can help you pay for the costs you might incur when you’re older. But without that insurance, here are the price tags you may be looking at:
|
Long-term care service |
Average annual cost (nationally) |
|---|---|
|
Assisted living facility |
$ 48,612 |
|
Health assistant |
$ 52,624 |
|
Nursing Home Shared Room |
$ 90,155 |
|
Private Nursing Home Room |
$ 102,200 |
Data source: Genworth.
If you are now, after seeing these numbers, sitting with your mouth open, don’t worry, it is a natural reaction. But once you take a minute to get over that shock, you need to pick up the phone or jump on the Internet and start exploring your long-term care insurance options. Having a policy to pay what could be a substantial part of your out-of-pocket costs could save you and your loved ones untold financial hardship should the need for long-term care arise.
When do you need to apply for long-term care insurance? Your best bet is to do it in the mid-50s. At the time, you’re not stuck paying those premiums for too long, but you’re also more likely to get approved at an affordable premium rate. But don’t assume you can’t apply if you’re over 60. You may pay more per month, but that is the compensation for not having obtained a policy before. Also, if you have a health savings account, you can use the money to cover your long-term care insurance premiums, making them easier to switch.
Even if your health is excellent upon retirement, you never know when you might end up in a long-term care situation, whether you plan it or not. Unless you know for sure that you will have a family available to provide care in your old age, it is worth assuming that you will need long-term care at some point. Having insurance to cover that cost could save you from the financial stress many unsuspecting seniors and their families face, so if you are retiring and unfamiliar with how long-term care policies work, it’s time to read. a bit.
