When it comes to planning their retirement, most people will rely upon their savings, 401(k)s and other forms of income to provide the security they will need for that phase of life.
However, many don’t consider a crucial need for their later years: long-term care insurance.
In fact, a recent Forbes study revealed only about one-quarter of adults nearing retirement have seriously considered getting long-term care insurance or a savings account dedicated to long-term care expenses.
Further, many consumers mistakenly think their health insurance or Medicaid will cover various aspects of long-term care services when that might not be the case. In a LIMRA study, 29% of respondents said they believe they own some form of stand-alone long-term care insurance coverage or combination life/long-term care insurance coverage. The data shows long-term care ownership is closer to 3.1%.
So why are Americans neglecting this aspect of financial planning? For many, common misconceptions are preventing them from being prepared. Here are six myths about long-term care and the truth you might not know from Bankers Life, a national life and health insurance brand.
Myth #1: I won’t need long-term care.
Reality: Needing help with such daily activities as eating, bathing, dressing, toileting and continence, among others, may seem like an unlikely scenario. However, about 70% of people aged 65 and older will need some type of long-term care during their lifetime, according to the Department of Health and Human Services.
Myth #2: My family will take care of me.
Reality: Physical, financial and geographical limitations prevent many people from caring for their aging relatives, even if they intended to. That’s why it’s important to be prepared to pay for the long-term care you may need some day.
Myth #3: Medicare will cover my long-term care.
Reality: Medicare is designed to cover acute care, or the care you need when you’re sick and will eventually recover from an illness. It doesn’t cover ongoing Activities of Daily Living services when those are the only care you need.
Long-term care insurance is designed to help cover ongoing custodial care services, which includes assistance with dressing, bathing, eating or other Activities of Daily Living.
Myth #4: I’ll use my Social Security benefits to pay for long-term care.
Reality: Long-term care is expensive, with homemaker services costing $163 per day on average and a semi-private room in a nursing home costing $260 per day on average, according to SeniorLiving.org. Even the maximum monthly Social Security benefit of $3,6275 won’t cover these amounts.
Myth #5: Nursing homes are the only option.
Reality: When you hear “long-term care,” you may immediately think “nursing home,” but today there are a wide variety of services available that you may receive at a facility, in the community or in the comfort of your own home.
Owning long-term care insurance can help ensure you receive the care you need on your terms—where and how you want it.
Myth #6: I will get long-term care insurance later, when I need it.
Reality: Qualifying for long-term care insurance coverage after you’re diagnosed with an illness is difficult. Applying for long-term care insurance at a younger age helps you qualify for coverage and lock in lower premiums. For this reason, many people purchase long-term care insurance in their 50s when they’re still in good health.
For more information on long-term care insurance, reach out to a Bankers Life agent, or visit bankerslife.com.
By incorporating long-term care insurance into your retirement plans, you can help prepare yourself for a comfortable future, come what may.
Credit: StatePoint
