A white man in his 50s with a gray-speckled beard and hair sits at a kitchen table next to his wife, who has graying, straight hair and is also white. They both wear glasses and light-colored clothing. They look at a phone in the man’s hand. On the table is an orange, orange juice and a plate of toast.

People are living a lot longer. What happens if you need care as you age? 

Whether it’s home healthcare, assisted living or nursing home care, the financial and emotional burden can be staggering. Medicare does not cover long-term care.

This is one of the biggest concerns clients bring up: what happens to me and my family if I can’t take care of myself anymore? The truth is, if you don’t have a plan, you’re leaving your family to pick up the slack — both emotionally and financially.

Long-Term Care Costs in South Florida

The average cost of a nursing home in South Florida is $118,000 per year. That’s more than most families can afford.

Even if you do not go to a nursing home, costs for other types of care are also significant. Home healthcare starts at $25 per hour and only climbs depending on the level of care one needs. Assisted living facilities are a bit less expensive but do not provide the same level of care.

Without a plan, families are left with three options:

  1. Pay out of pocket (and potentially drain your savings).
  2. Spend down all your assets and rely on Medicaid.
  3. Purchase long-term care insurance.

Long-Term Care Insurance: Your Safety Net

There are two primary types of long-term care insurance policies you can buy. 

The classic option is traditional long-term care insurance. You buy a policy that provides a specific benefit amount, covers a set benefit period and may include inflation protection. There’s an “elimination period,” which is like a deductible: you pay for the first 90 days of care and then the insurance kicks in.

Hybrid policies are life insurance policies with a long-term care component. Essentially, they allow you to hedge your risk. If you need long-term care, the policy pays for it by accessing the life insurance benefit. If you don’t use all of it, your heirs get the remainder of the benefit.

It is important to consider that waiting too long to apply for these policies might prevent you from qualifying. The older you are, the more expensive it gets and the more likely you are to be denied for medical underwriting issues. The sweet spot for buying these options is around age 55.

How It Works

All long-term care policies — whether traditional or hybrid — cover nursing home care, assisted living and home healthcare. Claims are triggered if you can’t perform two out of six activities of daily living (often referred to as ADLs):

  1. Feeding yourself.
  2. Dressing yourself.
  3. Bathing yourself.
  4. Using the toilet independently.
  5. Getting in and out of a bed or chair.
  6. Maintaining continence.

The beauty of these policies is their customization. Have a tight budget? One can lower the benefit amount, shorten the benefit period and/or skip inflation protection. Most families find a plan that works for them and fits their budget. 

The Bottom Line

Long-term care isn’t just about protecting your savings. It’s about protecting your family — from stress, from financial strain and from making impossible choices when they’re already struggling. 

If you’re over 55 and haven’t started looking into long-term care insurance, now is the time. You’ll sleep better at night knowing you’ve got a plan. Give us a call to go over your options: 954-775-0275.

Noah Bick

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