You can be smart, but still carry bad information.
Perfectly smart people walk around with bad information. Don’t be one of them.
Long Term Care. Few topics generate more confusion and misinformation. But, long term care (or “LTC”) is too important to misunderstand. You need to know the facts, so read on to learn the facts behind the myths.
Myth #1: The odds of needing long term care are slim – especially if you are in good health today (or have “good genes”).
Every day until 2030, 10,000 Baby Boomers will turn 65.1 Those turning 65 today have nearly a 70 percent chance of needing LTC in the future.2 Add in today’s longer lifespans, and odds are, you or someone you love will be one of them. While one-third of today’s 65-year-olds may never need long-term care, 20 percent will need it for longer than 5 years.3
Myth #2: Long term care is covered by Medicare or other medical plans.
LTC is not typically covered by private medical insurance. Medicare may cover care received in a skilled nursing facility for a short period of time, but it won’t cover custodial or personal care services at home or assisted living, which often the greatest portion of long term care received.
Medicaid eligibility is restricted to those with limited assets. Those who rely on Medicaid may have to give up some control over their healthcare choices.
Myth #5: Most people only need long term care for a few months.
In fact, fifty percent of people require long term care for more than one year, and the average length of a long term care insurance claim for those people is 3.9 years.4 Projecting costs out 20-30 years to when you may need care, the numbers can quickly exceed your comfort zone.
Myth #6: Long term care insurance is expensive; I’ll just self-insure.
Costs for LTC insurance vary significantly based on individual situations and choices, but can actually be lower than many people believe.
While self-insuring may sound appealing, if you haven’t gambled correctly, any savings you’ve allocated to your LTC needs could be quickly depleted in the event of a catastrophic health event. Should you require a high level of ongoing care, LTC insurance provides a safety net and peace of mind.
Myth #3: I can count on my children to take care of me.
Many people are inclined to rely on family members when forming their long term financial plan. Ask yourself “Which family member will have the extended time and required skills to care for me?” It’s certainly helpful when a family member can spend a few days a week helping out, but it may not be realistic should you require a higher level of care for a longer period of time.
Myth #4: Long term care insurance only covers nursing homes.
LTC insurance is one of the best ways to stay out of a nursing facility, covering a myriad of services not otherwise available. It allows you to make good choices about where you will receive care – nursing home, assisted living, retirement community, or even your own home.
In addition to custodial costs, LTC insurance can cover things like visiting nurses, home health aides, friendly visitors programs, home-delivered meals, chore services, adult daycare centers, and respite services for caregivers.
Myth #7: I don’t need to buy long term care insurance until I’m in my 70’s.
While it might sound like a good idea to wait until you reach retirement age, the older you are, the higher your premium will be. For example, a 55-year-old might pay twice or even three times the premium a 50-year old would pay. Also, since an insurance company can decline you due to poor health, it’s preferable to shop LTC insurance when you’re younger, before any health issues arise.
For more facts about LTC insurance, and to discuss your individual situation please contact an LTC advisor. Our advisors review every situation on a case-by-case basis, and work with alums to present solutions that are best suited to their individual needs.
1“The Guide To Being A Baby Boomer,” seniorliving.org, May 2019.
2US Census Bureau, 2018.
3American Association for Long Term Care Insurance, 2019.