Long-Term Care Insurance
As the population is living longer and beginning to have lengthier retirements, long term care insurance becomes an essential financial planning topic.
Long-term care insurance deals with the ongoing support and services needed by aging individuals who have health conditions or disabilities. The three levels of care included skilled care (around the clock care), intermediate care, and custodial care. Interestingly enough, most long term care services are home based. This can include family caregivers, nurse aides or home health workers.
The conversation around long term care insurance is important because up to 40% of people will need some level of care after reaching age 65. Approximately, 14% of people age 71+ have Alzheimer’s disease, which often leads to the need for nursing home care. The issue with this is the rising cost of nursing home care. Currently, the average annual cost of 1 year is $74,820. Twenty years from now this number will rise to $135,133. This is clearly an important area to address within your financial planning.
Beginning to think about these issues could help with significant savings in the future. If looking for a policy, the benefit amount, benefit period, elimination period, the types of facilities included and inflation protection are all important factors to consider.
Also, it’s great to note that the insurance premiums are deductible depending on age and price. The 2014 break down is as follows:
Age 40 or under: $370 is deductible
Age 41-50: $700 is deductible
Age 51-60: $1,400 is deductible
Age 61-70: $3,720 is deductible
Age 70+: $4,660 is deductible
Does anyone in your family use long term care insurance? Do you plan to purchase it?