Steep rate increases over the past year have forced many seniors, especially in Florida, to drop their long-term care insurance policies and rely instead on savings and the sale of their home to carry them through old age when illness or injury may necessitate a move into a nursing home. With the money invested in paying for insurance gone and rates too high to keep up, some seniors will rely on government assistance if medical and care giving needs exceed their accumulated wealth.
According to a CBS News, MoneyWatch report, longer life expectancy, savvy seniors who held on to LTC policies without allowing them to lapse and lengthy illnesses have left insurers looking for ways to offset unanticipated costs. Many have jumped rates, in some cases doubling annual premiums, as well as decreased and delayed benefits for those who are still insured.
That leaves many younger seniors contemplating their options for care as they reach the end of life wondering if LTC insurance is a gamble. Seniors will need to be careful to ensure the money they pay into a policy won’t be lost (check for a non-forfeiture option) and can be used for nursing or other care or as a death benefit for family. Saving for long-term care independently is another option for seniors thinking about long term care and end of life planning. Talking with a trusted financial advisor can help you make the best decision for your situation. The following is some data that may help inform your decision:
- Average nursing home stay for discharged residents – 892 days (2.44 years)
- Length of stay for patients who eventually died in nursing home – five months
- Number of Americans 65 and up who needed long-term care in 2012 – 9 million
- Number of Americans 65 and older expected to need long-term care by 2020 – 12 million
- Median cost of nursing home care in U.S. per year – $73,000
Source: Morningstar Independent Investment Research
The data given in the article is really useful while we plan to get a long term care insurance.