What Are Alternatives if LTC isn't Right for You?
Almost 70% of Americans aged 65 or older will require long-term care. This type of care includes non-medical services such as bathing, dressing, eating, and mobility. However, the cost of long-term care (LTC) insurance has been rising by double digits year after year, putting the coverage out of reach for many individuals.
We offer six potential options to help mitigate the cost of care if you haven’t purchased a long-term care insurance policy, are unable to qualify for coverage, or are seeking alternative solutions:
Short-Term Care Insurance: Also known as convalescent care, short-term care policies provide coverage for one year or less. Because insurance companies have a shorter commitment, premiums are substantially lower than traditional long-term care policies with fewer qualifying requirements.
Critical Illness Insurance: Critical care and critical illness policies will pay a lump-sum benefit to insureds diagnosed with serious illnesses such as cancer, stroke, or heart attack. Some insurance companies offer daily or monthly inpatient rehabilitation and continuing care benefits.
Annuity Products: By providing a guaranteed stream of income, long-term care annuities offer special provisions to help pay the cost of care. A lump sum of money is usually required to invest in these annuities, and the income derived from them may still fall short of what is needed. However, annuities may be purchased regardless of your health.
Life Insurance Benefits: Some permanent life insurance policies, including whole and universal life, come equipped with accelerated benefits riders. These endorsements allow insureds access to the death benefit proceeds. While every company’s policy language will vary, it is common for accelerated benefits riders to trigger if the insured is diagnosed with a terminal illness.
Hybrid Insurance: A disadvantage of traditional LTC insurance is that premiums are paid, whether or not benefits are used. A hybrid life and long-term care policy provide a lump sum payment for LTC expenses. Yet, your beneficiaries will receive a death benefit if you do not spend all the money earmarked for care.
Medicaid Services: The government program will pay for long-term care services under certain financial circumstances. To qualify, your income must be limited with combined assets of less than $2,000 as an individual or $3,000 for a married couple.
Depending on the care you require, long-term care services vary dramatically, costing as low as $50 a day to more than $250. This is why it is important to review your financial health before committing to an LTC policy or alternate solution. To learn more about your options, contact my office today. Together we can build a plan that’s right for you and your budget.
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