Long Term Care Basics You Should Know

As you likely know from your work in the senior market, longer lifespans mean more and more people will need long term care. But what is it, and how can you prepare and educate your clients to pay for it?

What is LTC?
Long term care is the help you need when you are no longer able to complete the Activities of Daily Living on your own. These include eating, bathing, dressing, toileting, transferring from bed to chair, and continence. Generally, if you cannot complete two or more of these without help, you are considered to need long term care. Long term care can be nursing home care, home health care, hospice care, and even home maker services to help you cook and clean.

What is LTCI?
Long term care insurance is insurance designed to pay some or all of the costs of long term care. Some policies will reimburse you for covered expenses up to a daily limit, and some policies will pay you a cash amount per day that you’re certified as needing care. You can also pay for long term care through additional benefits added on to whole life policies, or through hybrid products.

Why have it?
Skilled nursing facility care can cost close to $100k a year and home health care can cost close to $50k a year, and the cost is rising. Imagine if your clients suddenly had to pay that kind of cost out-of-pocket. Would many of them be able to, or would they be forced to sell off their assets in the hopes of Medi-Cal covering the necessary care?

Who needs it?
In short, everyone! Two out of three people will need long term care services at some point in their life, and one in three will need nursing home care. Even just a year or two of that kind of care can ruin a family’s finances. Because premiums are generally based on the age at time of issue, presenting long term care insurance to even your younger clients makes sense, as buying younger can save significant money in premiums over the life of the policy.

We all hope that we’ll live independent, carefree lives to the end, but the reality is that most of us will need some kind of long term care in our later years. Be prepared to present the options to your clients and help them protect themselves and their families.

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