As the old saying goes, the only two certainties in life are death and taxes. However, needing long-term care services isn’t too far behind, considering almost three out of four individuals will require care after the age of 65.
The statistics related to long-term care are eye opening to say the least:
When putting these figures in perspective, it might seem logical everybody needs a long-term care plan. However, there are a couple caveats to consider before purchasing a plan.
For starters, there are two groups that likely do not need a long-term care plan. The first group includes individuals who would qualify for Medicaid, which pays for most long-term care services. However, the income threshold to qualify for Medicaid is extremely low. In 2022, income must not exceed 133% of the Federal Policy Level, or $18,075 for individuals or $24,352 for couples.
The next group of individuals not likely to need a long-term policy is those with high, liquid net worth. Opinions vary on how much savings you should have before considering buying a long-term care policy, but usually such a conversation can begin around the $1.5 million mark.
Most Americans fall in between these two income extremes. If you find yourself a part of this group, then yes… you need a long-term care plan. But this doesn’t mean going out and purchasing a long-term care policy just yet.
A long-term plan is just that, a plan. And long-term care insurance may or may not become a part of it. Before purchasing coverage, it is important to evaluate several factors including your family’s financial capacity to pay for various long-term care services. Additionally, you may want to consider the medical and care needs of older family members as a guide in helping to determine the likelihood of needing care.
If it is determined that financially your family will financially suffer if you or your spouse will require long-term care, it is time to review your insurance options. As a relatively young insurance product, long-term care policies are continuously evolving. Indemnity, reimbursement, and hybrid policies are all very common.
Long-term care insurance is one of the most complicated insurance policies on the market today. For a comprehensive evaluation of your potential long-term care needs, and the options available to you, contact my office today.