Many clients have prepared financially for retirement, but have they truly planned for the costs that come with aging? With Americans living longer and long-term care costs rising rapidly, it’s more important than ever to ensure clients understand the financial implications of aging.
Read More: Top 5 Reasons Clients Should Consider Long-Term Care Insurance
The Growing Need for Long-Term Care
Most individuals will require some form of long-term care during their lifetime. Recent surveys estimate that more than half of Americans turning age 65 will need long-term care services at some point, whether in the home, in an assisted living setting, or in a nursing facility.
Alongside formal care, millions of informal caregivers (family members and friends) provide unpaid care, saving billions in otherwise paid labor costs but often at great personal and financial sacrifice. The economic value of unpaid caregiving continues to grow.
Read More: Top 5 Responsibilities of a Family Caregiver and How LTCI Eases the Burden
When you’re helping clients think about aging, important planning questions include:
1. Where do you want to receive care?
Many prefer to age in place, but that may require home modifications like ramps, widened doorways, or bathroom safety features. Clients should also consider if it’s safe for them to live alone as care needs increase.
2. Who will provide your care?
Are family members willing and able to help? Will caregivers need to relocate, reduce work hours, or leave their own careers? Family caregivers often assist with personal daily activities, so clients should consider whether they are comfortable receiving help with bathing, dressing, eating, etc.
3. How will you pay for care?
Care costs in the U.S. remain very high:
- Home health aides: $77,000–$96,000 per year, depending on hours
- Assisted living: About $70,800 annually
- Nursing home care: Private rooms now cost around $127,750 per year.
Costs vary widely by location and level of care and are climbing faster than general inflation.
What about public programs?
Transferring Financial Risk…Why LTCI Matters
Given the potentially devastating impact of long-term care costs on retirement assets, many people elect to transfer this risk to long-term care insurance (LTCI). LTCI provides benefit dollars to pay for care, whether it’s at home, in assisted living, or in a skilled nursing facility. Some policies also include funds for home modifications or even pay a cash benefit that can be used to compensate family caregivers or hire trusted aides.
Without some form of protection, clients may face hundreds of thousands of dollars in out-of-pocket expenses, and these figures will only rise due to inflation and workforce shortages.
Planning Takes Expertise
LTCI isn’t one-size-fits-all. Policies vary widely in benefit length and daily benefit amount, inflation protection features, elimination (waiting) periods, and optional riders. As a specialist in LTCI, you’re uniquely positioned to help clients navigate these complexities, helping them protect their retirement and maintain choices as they age.
If you have questions about a specific situation or want to explore LTCI options further, book a call with us.