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Are you building your future on a myth?

Discovering the truth of long-term care

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Bigfoot. Yeti. The Loch Ness Monster. For generations, people have told and retold stories of larger-than-life beings and mythical creatures. There’s usually no harm in believing these widely held but false ideas.

In other cases, widespread myths can lead people to be unprepared or underprepared for the future. On the important subject of long-term care, a number of common myths persist. Anyone who is preparing for retirement should learn the facts behind the myths and consider their need for long-term care services, including the potential costs.

Myth or fact?

The majority of people – 70 percent of adults age 65 and up – will need long-term care services at home, in an assisted living facility or in a nursing home.1 At the same time, the cost for care is high and rising. While both of these statements are true, many others about long-term care are not. Can you tell the myths from the facts?

‘A government program will take care of me.’

Many people get confused about the purpose of government programs like Medicare, Medicaid and Veterans Affairs. They mistakenly think such programs customarily pay benefits for long-term care services like nursing home stays.

The truth is, government programs are very limited when it comes to long-term care. They are difficult to qualify for and have specific requirements. Yet each program has specific rules that define the covered services, the timing of benefits, qualification guidelines and the dollar amounts individuals must pay on their own.

As for Medicaid benefits, when people can qualify and the program does pay long-term care costs, there’s a catch. Federal law requires states to recover the money Medicaid spent on an individual’s behalf from his or her estate after death. By definition, the estate typically includes real and personal property, which could force the person’s spouse to sell their home, or Medicaid could put a lien on the house in the amount of the benefits paid.

The most important thing to remember about government programs is that benefits are limited by availability and financial resources.

‘I can save the money I’ll need for long-term care services.’

Long-term care services can be very expensive. The growing costs for care present a huge financial risk to older adults’ retirement dollars. Those who plan to take on the burden for themselves and a spouse or other loved one could wipe out their lifetime savings much faster than they expect.

LongTermCare.gov reports that the average cost for a one-year stay in a private nursing home room is $83,580, and costs continue to rise.2

Of adults who need long-term care, 20 percent will require services for five years or more, according to LongTermCare.gov.3 At today’s average cost, a couple with $500,000 in assets would deplete their savings in just a few short years paying for long-term care services.

Harley Gordon, J.D., CLTC, author of The Conversation: Helping Someone You Love Plan for an Extended Care Event, asserts that a lasting illness “invariably leads to an invasion of portfolio capital, the purpose of which is to provide predictable streams of income. Using capital to pay for care results in unnecessary taxes, market timing and liquidity issues. And just as important, every dollar used to pay for care is one dollar less toward keeping future commitments to the family, keeping commitments to charities and providing a legacy to those (you love).”

‘Only old people need long-term care services.’

More than two-thirds of today’s older adults will need some kind of help with the basic activities of daily living for weeks, months or even years as they age, according to LongTermCare.gov.4

Even adults who aren’t elderly may need a little extra assistance due to an illness, injury, chronic condition or disability. Aging-related declines in eyesight, hearing, strength, balance and/or mobility also can lead older adults to need routine help.

‘Long-term care protection pays for nursing home care only.’

Long-term care benefits are designed to help people get the type of care they want — when, where and how they want it. Issued by an insurance company, this type of protection helps individuals and couples pay for the costs of long-term care services.

Long-term care protection can provide benefits for medical, personal and social services in a variety of settings — home, community, assisted living and skilled nursing facilities.

About 80 percent of individuals who need long-term care receive assistance at home, according to LongTermCare.gov.5 Many others are cared for in a community setting, and not in skilled nursing facilities. Insurance benefits can help expand choices to enable people to receive services when, where and how they are most needed.

Selecting and receiving the desired care requires thought and preparation. Adults should consider where they’ll want to live as they age and whether their current residence can meet their changing needs or be modified to do so. Benefits may be used to help people remain comfortably at home longer and avoid the necessity of a nursing home.

As needs become more pronounced, long-term care protection may provide access to adult day care, home health care visits, assisted living and other services. Benefits also can provide for caregiver training, care coordination, respite care and even hospice care in end-of-life situations.

‘We don’t need long-term care protection because we have each other.’

Couples and families may intend to provide care for each other when it’s needed. In fact, family members are the most common source of caregiving in the U.S. today. Typically, wives, sisters and daughters step into caregiving roles, making personal sacrifices to manage the extra responsibilities. Yet caregiving can take a heavy emotional and financial toll in even the closest, strongest families.

When preparing for retirement, separate fact from fiction and learn the truth about long-term care.

This article was brought to you by Barry Wirt, Jr of Premier Life Strategies, Inc. To learn more or ask questions about the content of this article, contact Barry at sales@plstrategies.com.

 

Footnotes:

  1. “How Much Care Will You Need?” LongTermCare.gov. http://longtermcare.gov/the-basics/how-much-care-will-you-need. Web.
  2. “Costs of Care.” LongTermCare.gov. http://longtermcare.gov/costs-how-to-pay/costs-of-care. Web.
  3. “How Much Care Will You Need?” LongTermCare.gov. http://longtermcare.gov/the-basics/how-much-care-will-you-need. Web.
  4. https://aspe.hhs.gov/basic-report/long-term-services-and-supports-older-americans-risks-and-financing-research-brief
  5. “Who Will Provide Your Care?” LongTermCare.gov. http://longtermcare.gov/the-basics/who-will-provide-your-care. Web.
  6. https://www.forbes.com/sites/nextavenue/2017/09/26/the-staggering-prices-of-long-term-care-2017/#6d942df92ee2

This is a solicitation of insurance. Contact will be made by an insurance agent or company. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice.

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Joint life long term care insurance from OneAmerica is so unique, it has received a United States patent!1 The policy is so unique in that it allows for us to cover TWO people under a SINGLE policy! Join us as we take a deeper dive below into the specifics of this innovative product from OneAmerica. Make sure to take a look at our example at the end of this post that shows a hypothetical husband and wife, and the benefits that they gain by doing their policy as one, rather than two individual policies. 

 

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What is it?

A joint life policy provides one pool of money to cover two people if a need for LTC arises. This shared benefit ypically costs less than purchasing two individual policies. Joint protection can be a great fit for spouses, siblings, and even business partners. We have some great ideas for parents and children that works wonders, and lowers costs!

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How does it work?

Joint life Asset-Care is medically underwritten, meaning both proposed insureds must apply and be accepted for protection. The amount of protection available is based on a number of factors, including the Joint Equal Age2, which is calculated by the company using both ages, genders, and underwriting classes.

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What happens?

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Each insured has access to the full death benefit, up to the monthly benefit limit for LTC expenses.

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Each are eligible for their own monthly benefit limit. This means that the full death benefit is still available, but for a shorter period of time.

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The other insured still has access to the pool of money if a need for LTC arises, and can leave a death benefit if care isn't needed or fully used.

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Why do I want Joint LIfe Asset-Care?

Reduced cost/larger benefit pool: Spreading the risk over two lives instead of just one may reduce the cost and provide a larger pool of shraed benefits compared to two individual policies

Possible lifetime coverage for both: If the COB rider is selected, it applies to both insureds for one premium rate, locked in at the time of purchaes. Premieiums are guaratneed never to increase, even upon the death of the first insured.

Simplicity: A joint policy reduces the amount of paperwork that may be associated with two individual policies: one policy, one bill, one annual statement.

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Contact us today to have one of our advisors reach out to you to start planning your future! 

 

1. US Patent Number 6,584,446 2. This age difference may be narrowed due to results of medical underwriting

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