Long Term Care (LTC) is assistance with daily living tasks if a chronic illness or disability leaves you unable to care for yourself for an extended period of time. It could include care in your own home or in a specialized facility.
Do I need LTC coverage?
Have you ever had to care for a loved one? If not, could you imagine having to add that responsibility to your already-hectic life? Could you afford to quit your job to care for an elderly parent? What asset would you sell first to cover the expense? Do you want to put your children in that situation? Long Term Care insurance can provide you with money to help pay the costs associated with hiring professional caregivers.
- 70% of people over the age of 65 will require some LTC services.
- 40% of those receiving LTC are between the ages of 18-64.
Costs of receiving care vary depending on where you live, but it commonly will run between $3,000-$10,000 per month! LTC protection may be the one thing that saves your family from financial ruin.
Types of LTC Protection
Stand-Alone Long Term Care
Similar to car insurance, this is a pay-as-you-go use-it-or-lose-it style policy. We don’t generally recommend this style because you may pay and never get anything back.
Life Insurance Rider
This makes a life insurance policy multi-purpose. If you don’t need LTC, your beneficiaries receive the death benefit. If you DO need LTC, you can use the benefit while you’re alive.
Similar to a bank account, the money is still yours, but if you need LTC, the company gives you 2-4 times as much to use. If you never need LTC, your beneficiaries get the money.
Lifetime LTC Benefit
The styles we list above are available from multiple companies. One thing to be aware of, however, is that all of them have a maximum benefit that you can use and then your benefit runs out. One particular company we work with gives you multiple options for how you pay (single deposit, monthly payments, or a hybrid of the two), but the true distinction is that they have an option for a lifetime LTC benefit – however long you need it it’s there for you!
Schedule a time to go through your options so you can make an informed decision.