Long-Term Care Insurance
Written by Thomas M. Geier, CPA, CFP®, PFS
The fantastic breakthroughs in medical care and health advances have made the prospect of longer, more enjoyable lives in our later years more exciting. However, it still remains a fact that the older we get, the more challenging day to day life becomes. Some of the routines and household chores that we easily perform in our youth and take for granted seem to require more and more time and energy as we age. In many cases, we get to the point where we just need some help.
Fortunately, the market for providers of the help and care we may need in our elder years has recognized this. Today, when people are no longer able to care for themselves due to physical or cognitive impairments, a broad range of providers are available. These consist of adult day care centers, assisted living facilities, nursing homes, and in-home services. The level of help provided can range from household assistance, such as cleaning and meal preparation, to 24-hour skilled nursing care.
Thankfully, as more qualified care providers have entered the market, costs have come down. However, some are still significant and can drastically impact your retirement lifestyle. For example, the annual cost for a private room in a nursing home averages over $50,000 according to AARP.
How to Defray the Expense
In order to defray the expense that this additional help incurs, some people consider purchasing long-term care insurance. Such policies may be expensive and the pros and cons need to be examined. It is important to shop carefully. These policies are designed with the goal to protect your financial assets while providing options for obtaining the level of help required. For example, some people are hit with an illness and need help during recovery. Others have more severe and long-lasting medical conditions. Having a policy that is flexible is an advantage.
Your study of long-term care policies will require some understanding of medical and insurance terminology. Most policies address concepts such as elimination periods, insurance riders, and conditions that are necessary to trigger benefits, such as activities of daily living. At Geier Asset Management, we can help you navigate through these topics and address some of the more difficult decisions, such as the burden of sustained care provision on your family members. We’ll help you weigh the insurance costs verses the benefits to determine if a long-term care policy is appropriate for you or not. As with any proper financial plan, visualizing your retirement life is important. Addressing possible later-life health needs is a critical piece of that successful plan.
©Geier Asset Management, Inc. April 2017. Thomas M. Geier is a Vice President of Geier Asset Management, Inc., a Registered Investment Advisor. The above blog reflects the opinions of Mr. Geier and not necessarily the firm. Any advice given is general in nature and investors must consider their own individual circumstances. Past performance is no indicator of future performance. The firm makes no warranties or representations of any kind relating to the accuracy or timeliness of the information provided.