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There is much to celebrate as people live longer than ever before.  But with increased longevity comes this reality:  About 70% of people over age 65 will need some kind of long-term care services during their lifetimes, and 40% will need care in a nursing home.*

More startling to many is the fact that this care is not covered by traditional health insurance or Medicare. 


The High Costs of Long-Term Care

Long-term care (LTC) is the assistance you need when you can no longer care for yourself.  It includes assistance for activities of daily living, like bathing, dressing, eating, toileting, and taking medications, over a period of months or years.  

Because this care is not covered by traditional health insurance or Medicare, the costs fall to you and your family.  It can wipe out your retirement savings and create a significant financial burden for your loved ones.  The cost projections in the table below are for a resident of Maryland.  Do you have enough saved to cover these costs - on top of your normal household expenses?

Types of Long-Term Care

Annual Cost in 2017

Annual Cost in 10 Years

Annual Cost in
20 Years 

Health Aide

$52,281

$66,817

$94,425

Adult Day Care

$20,150

$27,080

$36,393

Assisted Living Facility

$49,800

$66,927

$89,944

Nursing Home, Semi-Private Room

$109,500

$147,159

 $197,767

Nursing Home, Private Room

 $118,990

$159,913

$214,909

Source:  Cost of Care 2017 Survey, median costs and projections for Maryland.  Genworth Financial, Inc., available at www.genworth.com.  


Long-Term Care Insurance Options Can Preserve Your Savings and Ease the Worry.  

Traditional Long-Term Care Insurance was introduced some years ago as a way to insure for these major expenses.  New alternatives have been created that offer additional choice in how to cover the costs of long-term care.  All three options allow your family to supervise your care rather than provide the care.  


Traditional Long-Term Care Insurance (LTCI) 

 LTCI Benefit Choices

  • Benefit Period - length of coverage in years
  • Daily Benefit Amount -
    $50-$500 per day
  • Monthly Benefit -
    $1,500-$15,000
  • Waiting Period - 30, 60, 90, 180 or 365 days
  • Home Health Care Benefit
  • Inflation Protection
  • Share Benefit Option
 

Traditional Long-Term Care Insurance was developed specifically to help pay for assistance with the activities of daily living that other insurance does not cover.  LTCI charges a premium to protect against the risk of much larger out-of-pocket expenses in the future.  

Premiums are based on many factors, including age at the time of purchase, level of benefits, and your health at the time of purchase.  Because there are multiple choices in coverage, each policy is custom-built to satisfy your individual needs and budget.  

Many people benefit from purchasing LTCI while in their 50s, before chronic conditions become a factor.  


Hybrid Plans

Hybrid long-term care (LTC) products do not offer the same stand-along coverage as traditional LTCI, but solve the "use it or lose it" concern.  Even if you do not required long-term care, your money can be used for other purposes.  They offer flexible funding options.

Life/LTC Insurance Policy
A Life/LTC insurance hybrid plan is designed to pay out LTC benefits if long-term care is needed, and a death benefit to your beneficiaries if LTC is not needed.  It is structured as a Universal or Whole Life Insurance policy that requires underwriting, plus the LTC rider.  If the LTC benefit is used, the death benefit is reduced.  IF not, the full death benefit goes to your heirs tax-free.  

Annuity/LTC Insurance Contract
An annuity is a contract for a structured series of payments that is normally purchased with a lump sum investment. The contract provides all the security and benefits of a fixed annuity, along with enhanced benefits if you need qualified long-term care services.  If you need access to funds for a predictable income stream, then it works just like a deferred annuity with guaranteed payments for a lifetime, a fixed number of years or both.  

An Annuity/LTC Insurance hybrid plan incorporates a rider that increases your payments in the event you require long-term care.  Usually the long-term care coverage is 200 to 300 percent of the annuity benefit.  You receive annuity payments whether or not you end up requiring long-term care. 

GEBA Can Help You With the Protection You Need

Our Long-Term Care Specialist will meet with you to help you understand the many options and costs of LTC protection.  To schedule an appointment, call GEBA at (301) 688-7912 or (800) 826-1126, emailgeba@geba.com, or click on the Schedule an Appointment.  

*National Clearinghouse for Long-Term Care Information, available at www.longtermcare.gov.