Business
Mark MaurerWhat You Need to Know About Late in Life Healthcare Expenses One out of three men will end up in a nursing home, and two out of three women will require long-term care. So many people purchase health and life insurance, but why do more not prepare financially for the extended care they’ll need in their final years? Mark Maurer, President and CEO of LLiS, joins the Wealth Summit to discuss how you can reduce the financial burden of long-term care. KEY POINTS-What is long-term care insurance?-How much does long-term care insurance cost?-Who should consider buying long-term care insurance? While health insurance doesn’t prevent you from getting sick, it does provide a funding mechanism to pay for the things designed to treat you and expedite your recovery. Long-term care insurance acts in much the same way. While medical insurance is designed to cover things that will get you better, long-term care pertains to a chronic illness—something that probably isn’t going to go away. As Social Security begins to dry up, paying less and less to retirees, we’re seeing more multigenerational households. However, eventually most elders reach the point of needing expert care beyond what relatives can provide. Contrary to popular belief, Medicare only covers 100 days of long-term care. Once that time period expires, Medicaid will be able to cover some expenses, but you most likely won’t be able to choose the specific facility. Mark presents a chart at the 10:30 mark in the video detailing the varying expenses associated with long-term care. A long-term care insurance policy typically covers $3,000 per month, and it can be used for differing levels of care. Where that care is given depends on the significance of the condition. As previously mentioned, 2/3 of women will require long-term care, along with 1/3 of men. Insurance companies have recognized that women have a longer life expectancy so they’ve boosted the rates for female premiums. Long-term care policies are not inexpensive. Mark recommends people who own a house and have less than a half a million in assets steer clear of long-term care policies. The premiums could wipe out your assets, drastically changing the retirement lifestyle you’ve been planning for years. A good time to start considering the policy is in your mid-50s. While perhaps not as popular as health insurance or life insurance, long-term care insurance can prove to be just as valuable. Like most financial decisions, the choice to get a policy depends on your individual situation—health, financial status, location, family factors, etc. While the premiums can be costly, if you have a large enough portfolio of relatively liquid assets, a long-term care insurance policy could ease stress and provide comfort down the road for both you and your loved ones.