What is Long Term Care, how much does it cost, and why should we be planning for it?

Long Term Care Costs

Long term care costs can get expensive quickly, so it's important to understand the basics of qualifying, and what to expect for annual costs for services.  Many assume that Long Term Care means living in a nursing home, but in reality 70% of claims begin when people are still living in their home.

One will require Long Term Care (LTC) assistance when they can no longer perform two Average Daily Living activities, and this includes things like:

  • Meal Preparation 

  • Dressing 

  • Toileting

  • Bathing 

  • Walking

  • Incontinence

  • Everyday Mobility 

When you are not able to accomplish two or more of these tasks on your own, then you qualify for Long Term Care and will need assistance to survive.  Once you can no longer get up and down from a chair, you're not likely to be able to dress or bath on your own, so qualifying for two of these is pretty easy when just one is already an issue for you.  

Medicare will only cover Long Term Care expenses following an injury or illness, and is preceded by a hospital stay of at least 3 days, and even then it is for as little time as possible.  So if you don't have at least some form of Long Term Care insurance, and you don't have an illness or injury with a hospital visit, you will be required to pay Long Term Care bills out of pocket, and they can become very expensive very fast.  This is also known as self insuring, which is not a great idea.  Another option is coinsurance which means you have some coverage, but aren't paying astronomical amounts of money for full coverage, and you can choose the amount of coverage you want with an alternative insurance plan.

Long Term Care can come in the form of at-home care, home health aide, homemaker services, chore services, nurse and therapist, personal care, respite care, adult day care, assisted living facilities, bed reservation, nursing home facilities,  and hospice care, so there's a variety of professional care services to suit your situation.  It does not mean that you have to leave your home, but you may not be able to live there independently anymore, so it's important that you have some kind of coverage lined up in case you need it. 

Long Term Care Costs vary by state, and if you want to drill down to your specific area, this is a great calculator, but to give you some general costs, to have someone to your home 8 hours a day can easily cost $70k a year, while an assisted living facility can cost as much as $8k+ a month or $100k+ per year if you can get on the toilet by yourself.  If you need assistance getting onto the toilet, your bill just went up to $160k+ per year.  The average amount of time one needs Long Term Care is 5 years, with an average cost of $100k per year.  30 years from now average total costs for someone needing Long Term Care are expected to reach $1.5MM. 


Here's what some of the more modest monthly service costs look like:

  • Adult Day Care (5 days a week) - $1455

  • Homemaker Services - $2311

  • Home Health Aid (4 hours/day) - $2555

  • Semi Private Nursing Home Room - $6235

  • Private Nursing Home Room - $6965

It's hard to think about these costs, and you're probably hoping to protect yourself with some long term care insurance.  The alternative insurance we recommend is a single premium fixed annuity with a $35k minimum investment.  The insurance company is offering to double or triple your investment if you enter a long term care situation, and the amount you put in initially is entirely up to you so long as you meet that minimum.  The more money you decide to invest, the more monthly reimbursement you're allowed, and if you don't end up needing it, you can get your money back after the surrender period or you can leave it to a beneficiary, so if you don't use it you get it back.  100% of clients are made whole 100% of the time, so you can't lose with this product.  


Schedule an appointment today with one of our agents to see if you qualify.