All too often, seniors must deplete their nest eggs to manage unforeseen long-term care costs. However, most of us require long-term care at some point in our lives. What will you do to protect your finances and ensure you receive the care you need?
Medicare, coverage and options
People are living longer and along with growing older are increasing costs for care. In fact, according to some researchers, more than two-thirds of us will require long-term care at some point. Many Americans believe they can rely on Medicare to tend their long-term care needs, and although Medicare is an important resource for many seniors it covers little when it comes to assisted living or nursing home expenses. Supplemental Medicare Advantage plans can help manage expenses associated with prescriptions, dental and vision care.
If you are currently eligible for Medicare insurance or closing in on Medicare eligibility, it’s important to get a better understanding of how to navigate some of the vital Medicare Advantage enrollment dates. Read up on those first so you can formulate your decisions ahead of time.
Costs are soaring
USA Today explains the cost of long-term care is rising with home health aide services now averaging $21.50 an hour, and a year in a private nursing home running consumers $97,000 annually per person. Most people can’t afford that expense out of pocket, so planning ahead is smart and responsible. Coverage costs are rising as well with few employers offering assistance with long-term care insurance expenses. Overall, costs are continuing to rise.
Plan and prepare
Given the current conditions, it’s vital to devise a plan for long-term care. Even if you have family members you believe will tend your needs, a backup plan is advisable, since life situations can change. Forbes notes many people opt for traditional long-term care insurance. Coverage is usually for up to four years, and policies are designed to cover or supplement long-term care costs without jeopardizing the policyholder’s assets.
There are also hybrid policies that combine life insurance with long-term care insurance. These policies usually require a significant upfront payment, and policyholders have the option of using funds from the death benefit toward long-term care expenses. If they don’t dip into the death benefit, that amount remains intact for beneficiaries. For those who can’t afford the premiums on long-term care insurance policies, one suggestion is to exchange an older life insurance policy or annuity product for a combination policy.
For those whose are looking at protecting loved one’s financial security, another consideration is final expense insurance. It’s easy to qualify and a great way to alleviate stress for family members during an emotional time.
Change living arrangements
Some seniors decide to pre-pay care in the form of a continuing care community. With these arrangements, you pay a substantial lump sum up front, then an additional monthly fee. This is often an expensive option, but everything is included from the time you enter the community for the remainder of your life, even if you enter fully independent and regardless of what needs arise.
Another trend that suits some seniors is medical tourism, or even moving overseas permanently. Some cultures are particularly warm and respectful toward seniors and offer good care at an affordable cost. For those facing terminal illness, some parts of the world offer more opportunities to decide how you want to live out your final months. It’s ultimately a personal decision that requires research and planning.
Deciding how you want to handle your long-term care needs and expenses requires planning and preparation. Weigh your situation carefully and explore which options seem most appropriate for your situation. With research and forethought, you can enjoy better peace of mind when looking toward your golden years.
Site last updated: 21. May 2020
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