Annuities

Are your clients building their financial future on a myth?

Discovering the truth of long-term care

Bigfoot. Yeti. The Loch Ness Monster. For generations, people have told and retold stories of larger-than-life beings and mythical creatures. There’s usually no harm in believing these widely held but unverified ideas.

In other cases, widespread myths can lead people to be unprepared or underprepared for the future. On the important subject of long-term care, a number of common myths persist. Anyone who is preparing for retirement should learn the facts behind the myths and consider their need for long-term care services, including the potential costs.

Myth or fact?

The majority of people – almost 70 percent of adults age 65 and up – will need long-term care services at home, in an assisted living facility or in a nursing home.1 At the same time, the cost for care is high and rising. While both of these statements are true, many others about long-term care are not. Can you tell the myths from the facts?

‘A government program will take care of me.’

Many people get confused about the purpose of government programs like Medicare, Medicaid and Veterans Affairs, thinking such programs customarily pay benefits for long-term care services like nursing home stays.

The truth is, government programs are limited. Each program has specific rules that define the covered services, the timing of benefits, qualification guidelines and the dollar amounts individuals must pay on their own.

As for Medicaid benefits, when people can qualify and the program does pay long-term care costs, there’s a catch. A federal policy requires states attempt to recover the money from certain types of Medicaid spent on an individual’s behalf during their lifetime.2

‘I can save the money I’ll need for long-term care services.’

Long-term care services can be expensive. Those who plan to take on the burden for themselves and a spouse or other loved one could wipe out their lifetime savings much faster than they expect.

LongTermCare.gov reports that the average cost for a one month stay in a private nursing home room is $7,698, and costs continue to rise.3

  1. “How Much Care Will You Need?” LongTermCare.gov. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html. Last modified 10/10/2017.
  2. “How Medicaid Recovers the Cost of Long-Term Care From Your Estate After You Die” Nolo.com.  https://www.nolo.com/legal-encyclopedia/how-medicaid-recovers-the-cost-long-term-care-from-your-estate-after-you-die.html.  2019.
  3. “Costs of Care.” LongTermCare.gov. https://longtermcare.acl.gov/costs-how-to-pay/costs-of-care.html. Last modified 10/10/2017.

‘Only old people need long-term care services.’

More than two-thirds of today’s older adults will need some kind of help with the basic activities of daily living for weeks, months or even years as they age, according to LongTermCare.gov.4 Even adults who aren’t elderly may need a little extra assistance due to an illness, injury, chronic condition or disability.

‘We don’t need long-term care protection because we have each other.’

Couples and families may intend to provide care for each other when it’s needed. In fact, family members are the most common source of caregiving in the U.S. today. Yet caregiving can take a heavy emotional and financial toll in even the closest, strongest families.

When preparing for retirement, separate fact from fiction and learn the truth about long-term care.

  1. “How Much Care Will You Need?” LongTermCare.gov. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html. Last modified 10/10/2017.

Products issued and underwritten by The State Life Insurance Company® (State Life), Indianapolis, IN, a OneAmerica company that offers the Care Solutions product suite. This is a solicitation of insurance. Contact will be made by an insurance agent or company. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice.  Policies and long-term care insurance riders have exclusions and limitations.  Details about the cost, benefits, limitations and exclusions of this policy and long-term care riders will be provided by a licensed insurance agent.  Are you building your future on a myth? article published 7/26/19.

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