Myths & Half Truths Exposed

Until you go through it, you just don’t know how emotionally and financially devastating it is to put a loved one into a nursing home. Couple this with the fact that the 100+ community is the largest growing segment in the USA. This means that more and more of us living longer. Long-term care insurance is becoming more and more important to protect your retirement and your family’s standard of living. In fact, what you think you know about long–term care might be based on myths and half truths that could lead you to make poor decisions about the type of care that you may need.

Myth: I won’t need long–term care.

Fact: Roughly 40% of deaths in the United States are now preceded by a period of enfeeblement, debility, or dementia that can last for years. Studies put the chances of a 65– year–old eventually needing long-term care from 20% to 49%, depending on the study and methodology used. Two–person households bear a higher risk. If one spouse needs long–term care, it could consume income and assets the other needs for living expenses.

Myth: Medicaid will pay for my long–term care.

Fact: To qualify for Medicaid, you basically need to be impoverished or willing to “spend down” your assets to the state–required level before you can begin collecting benefits. When you apply, Medicaid has the right to look back at all your financial transactions over the preceding 60 months to discover whether you gave away your assets or sold them for less than fair market value in order to qualify for benefits. If so, you could be ineligible for full Medicaid benefits for up to 100 months.

Myth: I can’t afford long–term care insurance.

Fact: You may believe that long–term care insurance is too expensive, but not having it can be much more expensive if you eventually need care. The national average cost for nursing–home care is $70,912 per year, although the cost can vary greatly among geographical regions. By comparison, the national average long–term–care insurance premium for a 55–year–old is about $665 per year for a married individual and $1,075 for a single individual. Waiting until age 65 to purchase a policy would increase these average amounts to $1,292 and $1,923 per year, respectively. In the end, your decision boils down to paying long–term–care costs yourself or transferring some of the financial risk to an insurance company through a long–term– care policy.