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As baby boomers leave their careers behind, long-term care insurance may become very important in their financial strategies…

How will you pay for long-term care? 

The sad fact is that most people don’t know the answer to that question. But a solution is available.

As baby boomers leave their careers behind, long-term care insurance may become very important in their financial strategies. The reasons to get an LTC policy after age 50 are very compelling.

Your premium payments buy you access to a large pool of money, which can be used to pay for long-term care costs. By paying for LTC out of that pool of money, you have the ability to preserve your retirement savings and income.

The cost of assisted living or nursing home care could motivate you to pay the premiums. AARP and Genworth Financial conduct an annual Cost of Care Survey to gauge the price of long-term care.

The 2017 survey found that:

  • The national average annual cost of a private room in a nursing home is $97,455 – $267 per day and going up about 4% a year.
  • A private, one-bedroom unit in an assisted living facility averages $45,000 annually – and that cost is projected to rise 3% per year.
  • The average annual payments to a non-Medicare-certified, state-licensed home health aide are $49,192.1

Can you imagine taking an extra $40-100K out of your retirement savings in a year? What if you had to do it for more than one year?

The Department of Health and Human Services says that about 52% of today’s 65-year-olds will require some kind of long-term care during the remainder of their lifetimes.2

Why procrastinate?

The earlier you opt for LTC coverage, the cheaper the premiums. This is why many people consider purchasing it before they retire. Those in poor health or over the age of 80 are often ineligible for coverage.

What it pays for.

Some people think LTC coverage just pays for nursing home care. Not true: it can pay for a wide variety of nursing, social, and rehabilitative services at home and away from home, for people with a chronic illness or disability or people who just need assistance bathing, eating, or dressing.3

Choosing a DBA.

That stands for Daily Benefit Amount, which is the maximum amount your LTC plan will pay for one day’s care in a nursing home facility. You can choose a Daily Benefit Amount when you pay for your LTC coverage, and you can also choose the length of time that you may receive the full DBA every day. The DBA typically ranges from a few dozen dollars to hundreds of dollars. Some of these plans offer you “inflation protection” at enrollment, meaning that every few years, you will have the chance to buy additional coverage with varying compounding options – so your pool of money has growth potential.

The Medicare misconception.

Too many people think Medicare will pick up the cost of long-term care. Medicare is not long-term care insurance. Medicare will only pay for the first 100 days of nursing home care and only if 1) you are receiving skilled care and 2) you go into the nursing home right after a hospital stay of at least 3 days. Medicare also covers limited home visits for skilled care and some hospice services for the terminally ill. That’s all.4

Medicaid can actually pay for long-term care if you are under severe financial strain. Are you willing to wait until you are broke for a way to fund long-term care? LTC insurance provides a way to do it.

Why not look into this?

You may have heard that LTC insurance is expensive compared with some other forms of policies. But the annual premiums (typically a few thousand dollars) may seem minimal compared to real-world LTC costs. Ask us about some of the LTC choices you can explore – while you may have life, health, or disability insurance; that’s not the same thing as long-term care coverage.3

If you have any questions about this, please call us at (865) 226-9982 or email us at [email protected]


This material was prepared by MarketingPro, Inc. for use by TVAMP.


1 – genworth.com/about-us/industry-expertise/cost-of-care.html [8/14/17]

2 – nextavenue.org/aarp-long-term-care-scorecard/ [6/14/17]

3 – fool.com/retirement/2018/02/02/your-2018-guide-to-long-term-care-insurance.aspx [2/2/18]

4 – forbes.com/sites/nextavenue/2017/11/21/medicare-medicaid-and-long-term-care-your-questions-answered/ [11/21/17]