One stumbling block many people face when considering long-term care insurance (or other alternative insurance forms, that is) is this idea they won’t ever need it. Sadly, most people don’t think they will ever get involved in a car accident, and if automobile insurance wasn’t mandatory in most states, a growing majority of people probably wouldn’t carry that, either. The peace of mind of having insurance outweighs the long-term care insurance cost.
Yet, almost every single person driving on the road today has either been involved in at least a minor fender bender, bumped into a pole or wall, or will.
While the same stats may not hold with regard to long-term care for a person of advancing years, as our demographic continues to age, as people live longer, the odds of them requiring some type of long-term care in the future also increases.
That means, even if you don’t know whether or not you would require long-term care in the future, it is increasingly likely.
What are the costs of long-term care?
It all depends on where you live in the country. For example, in the South, a nursing home might cost anywhere between $65,000 and $75,000, on average, for one year. In Alaska, however, the bill could exceed $300,000.
The average cost for a nursing home stay is about $85,000. For assisted living, it can range from $55,000 and up, depending on amenities, luxuries, and so much more.
When it comes to home care, the average cost of full-time in-home care could range from $45,000-$55,000 annually.
Of course, not everyone is going to need full-time or around-the-clock care, which means in-home care could be a bit more affordable. Still, even if you are talking about part-time care, that could easily exceed $25,000 each year.
How are you going to pay for that long-term care and long-term care insurance cost?
Many people incorrectly assume that Medicaid is going to cover their expenses. That is not going to happen, not until they have used up all of their available assets and the equity in their home, if they own it.
That can be a total shock, especially for somebody who had specific plans for their retirement. Let’s say an aging senior suffers a major medical emergency at the age of 72. The road to recovery is going to be long and difficult. They might have spent half a year in a nursing home and then another eight or nine months working with a physical therapist and relying on in-home support before they can be independent once again.
That could almost wipe them out financially, even using up all available equity in their house. Then what happens for the rest of their life? Is Social Security going to be enough to live on? Is their paltry pension from an employer going to cover their basic living expenses now?
You might not think you’ll ever need long-term care, but the longer you live, the more active you are, the more likely you will. So, knowing that, doesn’t carrying long-term care insurance make a whole lot more sense now?