Retirement Planning

Retirement Directions: 3 Reasons Why You Should Buy Long-Term Care Insurance

Because we can't predict how our lives will unfold once we retire, it may be a good idea to consider protecting your family and your finances with long term care insurance.

Long Term Care Insurance

The good news is that Americans are living longer. The not so good news is that many of us must figure out how we're going to cover the costs of healthcare associated with getting older and living another 10 to 20 years. One way to help cover long term medical expenses is to consider long term care insurance.

Unfortunately, long term care insurance hasn't been as well received as many other types of insurance products. Why? Because it's often thought of as unnecessary - a type of insurance for medical costs that are already covered under Medicare as we get older. But what many people don't understand is that long -term care isn't medical care per se, but help for basic personal tasks of everyday life (sometimes referred to as activities of daily living or custodial care), something that Medicare doesn't cover.

Long term care for a loved one can be expensive. According to the National Association of Insurance Commissioners (NAIC), the national average of basic nursing home care is more than $51,000 a year, with costs that will continue to rise.1 For this reason, the NAIC stresses the importance for consumers to fully understand the reasons behind buying long-term care insurance to best prepare them for the future.

The following are three reasons why you may need to consider long-term care insurance:

Reason #1: To protect your assets.

If your spouse requires some type of long term care, how do you plan on covering the costs? Many couples will have to rely on their combined income and assets to pay for the long term care of a spouse, putting a serious drain on your retirement savings. Long term care insurance can help solve this problem and allow you to retain more of your savings.

Reason #2: To help your family with your care.

Have your children or extended family promised to take care of you as you become older? Do they have the finances and time? A recent study shows that 46 percent of family caregivers spend more than $5,000 each year in caregiving costs, and 33 percent spent more than 30 hours per week on caregiving duties.2 While the thought having to pay for someone to help you with things such as toileting or bathing isn't a pleasant thought, it may become necessary at some point in the future. Long term care insurance will help pay for these types of services, ensuring that you get the care that you need while not putting a burden on your family's finances or time.

Reason #3: To maintain your independence.

Today's assisted living facilities are quickly becoming the preferred alternative to nursing home care, but this preference can come with a higher cost. Without the assets to cover the cost of this type of care, you may be eligible for a type of low-income program called Medicaid. However, the downside is that you must be able to qualify for the coverage and Medicaid typically only pays for a semiprivate room in a nursing home - not assisted living. Moreover, not all nursing homes will accept Medicaid patients.

The retirement direction that you take without having long term care insurance may not be what you planned. Without the protection, you're options for paying for these types of services may be paying out-of-pocket or self-funding your care, relying on family or friends for help, or working within the limitations of what Medicare/Medicaid may be able to contribute - if anything at all.

If you need more help understanding long term care insurance, visit the Protective Learning Center.

1http://www.naic.org/documents/consumer_alert_ltc.htm.
2Senior Care Cost Index. Caring.com. Caring, Inc. September 2014.
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Long Term Care And Your Retirement

Retirement directions are different for everyone. However, we can't ignore the fact that we are all living longer lives. For this reason, we need to plan for our long term health care needs. One way to help cover the expenses associated with long term care is with long term care insurance. This article looks at the importance of having coverage to ensure that you don't exhaust your assets, can maintain your independence, and not burden your family. For more information, visit the Protective Life Learning Center.


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

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