With the cost of long-term care insurance rising – 8.6% in 2014(1), we want to review some helpful tips for the time when you may be considering coverage for the more common and costly need of long term care for a loved one.
1. Put the cost of coverage into perspective. The average annual cost of a nursing home in New Hampshire is over $106,000. This amount grows by $20,000 when considering care in Massachusetts(2). When the other alternative is writing a check to cover these costs in addition to daily expenses for a healthy spouse, the need becomes more evident.
2. Don’t try to offset all costs of long-term care. Premiums for long-term care insurance can be quite surprising, and they are only increasing. During the planning process, keep in mind that you may have sufficient assets to cover a portion of your care, so lesser amounts of coverage can then be recommended to bridge the difference, and keep premiums reasonable.
3. Consider employer policies. Some larger corporations offer long-term care as an employee benefit. These options are often much cheaper than going on the open market. If you have this as an option or are already covered under an employer’s plan, check with your HR benefits office to see if the policy is portable upon termination of employment.
4. Consider hybrid life insurance and long-term care policies. These are becoming much more popular, and can combat the common questions: “What if I don’t need to use the insurance? I paid all that money for nothing?” Whether single premium products or life insurance policies with death benefit acceleration riders, these can buffer some of these increases in traditional LTC insurance premiums.
5. Have real, honest discussions. Don’t feel uncomfortable telling your advisor and/or spouse if you don’t want to be put into a nursing home or care facility – it is a common sentiment shared by many people. Considering and sharing which alternative you prefer can help keep everyone on the same page.
6. If you have any questions or concerns regarding long term care for you or a loved one, or are interested in an outside opinion, contact me and I would be happy to help you begin planning.
Footnotes:
1. Marsh, Ann. “11 Tips on Long-Term Care as Rates Rise.” Financial Planning Magazine. 28 Jan. 2015. Web. 26 Feb 2015
2. 2012 MetLife Market Survey of Long-Term Care Costs, November 2012.