Long term healthcare is quickly becoming one of the biggest problems facing baby boomers and others that want to protect their assets from being spent down. A recent study by Genworth, the largest long term care insurer in the US, states that almost two-thirds of all Americans over the age of 65 will need some type of long term care during their lives. Long term care is not just limited to the elderly though – about 40% of all people receiving long term care are between the ages of 18-64.
Even for the most disciplined savers, long term care costs can decimate a family’s hard-earned savings. Today, the average cost of a private room in a nursing home for one year is about $75,000. By the year 2030, that cost is projected by approximately $200,000 and by 2040 approximately $300,000.
Another 2010 study sponsored by Genworth indicated that medical expenses that aren’t covered by health insurance or Medicare are the top retirement concern of individuals over the age of 55. More than 90% of those surveyed said they have not even discussed the issue of long term care with their spouse, parents, or children. The following are some of the statistics from the Genworth survey:
Homemaker Services – average hourly rate of $18, 3.0% increase over 2009
Home Health Aide Services – average hourly rate of $19, 2.7% increase over 2009
Adult Day Healthcare – average daily rate of $60, 12.0% increase over 2009
Assisted Living Facility – average monthly rate of $3,185, 12.0% increase over 2009
Nursing home (semi-private room) – average daily rate of $185 (or $67,525 per year), 5.7% increase over 2009
Nursing home (private room) – average daily rate of $206 (or $75,190 per year), 5.1% increase over 2009
Since long term care insurance is usually purchased with a compound inflation benefit, the longer you wait to buy coverage, the less total benefits you will receive. As you get older, the rates are also higher and underwriting can be more difficult if you develop health problems.
Here’s an example of the cost of waiting to purchase long term care coverage. Assuming a 50 year old person with a 5% compound inflation option, a $6000 per month benefit would grow to:
Age 60 – $9,773 per month
Age 65 – $12,473 per month
Age 70 – $15,919 per month
Age 75 – $20,318 per month
Age 80 – $25,931 per month
Age 85 – $33,096 per month
If the same person waited until age 60, 65, 70, etc, to buy those coverage amounts, the cost would be much higher to start with.
To get a quote and compare long term care insurance policies from the top LTC companies in the industry, please complete the short form below, give us a call at 1-800-571-2980 from 9 AM to 9 PM eastern time, or send us an e-mail at [email protected] 24 hours a day. We can help design a long term care policy to suit your personal needs and budget. Due to the complex nature of structuring long term care plans, there is currently no way for us to offer instant online quoting.