The reality for many is that with longer life spans, comes the possibility of requiring additional years of care. Among Americans age 65 and older, 70% will need long-term care.1 If timed correctly, and you meet certain age and health status qualifications, you may be able to increase your chances of qualifying for long-term care insurance.
As the cost of care continues to rise, an essential piece of your wealth plan should address the question, “Who pays for what?” Recent studies show that two-thirds of Americans age 65 and older will require some form of long-term care.1 If you are among the “sandwich generation” which provides for both your growing children and aging parents, you may eventually wonder, “Will I pay for their care as well?” The good news is there are several options available to help you mitigate costs, including: Medicare, social security, military retiree and veterans’ benefits and long-term care insurance.
Don’t Wait Till It’s Too Late
Since Medicare and Medicaid generally do not cover the cost of long-term custodial care, having a long-term care insurance policy in place may play an essential role in helping you maintain your nest egg as medical bills continue to roll in. Despite the real urgency, many people underestimate their need for long-term care and postpone the decision to purchase coverage until they reach an age where it is either too expensive or unavailable to them because they are no longer insurable candidates.
Why Age Matters
Just like with life insurance policies, long-term care insurance becomes more expensive as you age. In addition, with the potential of physical illness or a disability, increased costs or prevention from obtaining coverage altogether becomes even more likely.
Most new long-term care individual applicants are between the ages of 55 and 64. Conversely, the age group that is most likely to be rejected for unacceptable health is 80+ (75% rejection rate) – with those ages 70 to 79 being rejected 45% of the time.1
If you still find yourself thinking, “I’m healthy now, take very good care of myself and have great genes. Chances are I will never need long-term care in my lifetime”, think again. The percent of the population aged 65+ with three or more disabilities has alarmingly surpassed the 10% threshold.1
Protecting More Than Just Your Assets
Having choices in long-term care planning is a great thing if used to your advantage. Whether you chose to self-insure, go with stand-alone long-term care insurance or choose a combination life and long-term care insurance, know that you are helping to protect your assets, your health and those that count on you.
Regardless of how you plan to address long-term care costs, remember to work with a professional, who can help make sure you understand the factors involved, ranging from the costs of different care facilities, how to choose and hire home health care providers --- and if you find yourself filling the role of caregiver, the importance of taking care of yourself first.
Anita Srivastava is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Ridgewood, NJ. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives
1U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longermcare.gov, October 2016.
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