Planning for the Long Term
It may be hard to think about the possibility of a time when performing routine tasks is difficult due to injury, illness, or aging. Long-term care (LTC) services can be expensive. Yet, if the time comes when you need substantial assistance performing daily tasks, it is unlikely you will want cost to be the primary factor influencing your long-term care decisions.
Planning early can help ensure you have more control over the type of care you receive, should the need arise. The sooner you begin to plan for long-term care, the more likely you are to qualify for various types of long-term care insurance. Starting early also means you may be able to meet your goal with lower installment savings amounts or annual premiums.
You don’t have to prepare for long-term care expenses alone. Our financial professionals can review a variety of solutions with you that may help you meet your goals.
Long-term care includes a variety of services and supports to help individuals meet their personal care needs over an extended period. These services include help performing activities of daily living (ADLs), such as eating, bathing, dressing, and using the toilet. Whether long-term care services occur in a nursing home, assisted living facility, or your own home, they can be costly.
Long-term care services are generally not covered under personal health insurance or Medicare because they are not intended to cure, improve, or treat a specific medical condition. Medicaid may help individuals with income and assets below state requirements.1
Potential Ways to Pay for Care
In some cases, family members and friends may be able to help with some of the care you need—preparing meals; providing transportation; and helping with housework, bills, or medication for example. Caregiving can be rewarding, but it can also be stressful. It’s important to recognize when family caregivers need a break or can no longer provide the care you require.
When professional long-term care is necessary, one option is utilizing your own financial resources such as savings, investments, income (pension, Social Security, annuities), or even your home or home equity. Consider how long these sources might last and what may be neglected if these funds are used for your care.
Another option is insurance designed for long-term care expenses, or with the option to use the policy’s primary benefits for long-term care if needed. For example, your existing life insurance or annuity may contain provisions to utilize benefits early in the event you need long-term care. It is important to have an insurance professional review your existing policies and carefully explain the differences in the types of coverage available.
Finally, you may be able to qualify for your state’s Medicaid program. Medicaid only pays for long-term care after you meet eligibility requirements, including specific restrictions on income and assets.1