The Single Biggest Devastator of Your Retirement Savings Is Not Having Long-Term Care Insurance
There’s something important everyone needs to remember when it comes to retirement planning: Your retirement is not just about you. If you are married or in a long-term relationship, you need to work with your partner to ensure each of you are financially prepared if something happens to the other. You
may need to consider other members of your family as well, particularly dependent children or someone who suffers from a disability.
Sometimes it’s easier to think about dying than living incapacitated, but it is an important distinction to consider. Once you pass away, your assets are distributed and your heirs decide how to manage them. However, if you are incapacitated in retirement, you will likely continue using your assets – perhaps at a faster clip than planned – potentially impacting your heirs’ financial futures.
Let’s focus on one issue in particular: long-term care. According to the Genworth 2019 Cost of Care Survey, the median national cost for various types of long -term caregiving services are:1
- In-Home Care: $52,624 per year (44 hours a week). This is in addition to the costs of remaining in your own home, such as food, utilities, maintenance, property taxes and homeowner’s insurance.
- Assisted Living Community: $48,612 a year (private, one-bedroom).
- Nursing Home: $102,200 a year for a private room; $90,155 for a semi-private room.
While a nursing home is the most expensive option, it would include expenses like meals and utilities, and
eliminate the cost of home ownership.
Many financial advisors recommend insurance products to assist with the potential costs of long-term care.
Insurance leverages manageable premiums to help cover the costs of big-ticket expenses that we otherwise
could not afford – much the way we insure our homes and our health care.
However, some people are reluctant to purchase traditional long-term care insurance because they may never
need it and view that as money wasted. Fortunately, there are now insurance products with the flexibility to help
meet multiple needs. For example, some life insurance policies offer a long-term care (LTC) rider, allowing
you to draw from the death benefit of the insurance policy to assist with long-term care expenses if necessary. In fact, there are a wide variety of insurance products designed to help pay for long-term care if needed, but otherwise available for income or an inheritance.
It’s important to remember that most life insurance policies are subject to medical underwriting, and in some
cases, financial underwriting, and the costs of a life insurance policy, including premiums and cost of insurance charges, is dependent on your age and health at the time of application. The addition of an
accelerated death benefit or LTC rider may require an additional fee and may not be available on all products.
If you would like to learn more on how to implement these long-term care strategies please call Carl or John at 800-303-9255.
Guarantees and protections provided by insurance products are backed by the financial strength and claims–paying ability of the issuing insurer.
1 Genworth. Oct. 2, 2019. “Genworth Cost of Care Survey 2019.” https:llpro.genworth.com/riiproweb/productinfo/pdfI282102.pdf. Accessed Jan. 21, 2020.