If you’ve ever experienced a long-term care event, you know just how complex it can be. From decisions about caregivers to whether insurance will cover your expenses, figuring out what to do in real time can be stressful, to say the least.
Fortunately, there are steps you can take today to help relieve some of that stress should such an event occur in the future. One solution is investing in long-term care insurance. We’ve outlined some common myths around long-term care costs to help you determine if long-term care insurance is right for you.
Myth #1: It’s unlikely that I’ll be impacted by long-term care expenses.
While it’s true that many of us will not need to have any long-term care, roughly one in four people will need support for longer than one year, according to the Society of Actuaries. That means, the likelihood of having long-term care expenses coupled with the potential size of those expenses makes preparing for this potential scenario essential.
Myth #2: I can wait to plan for long-term care expenses until I am retired.
Although the majority of long-term expenses occur after the age of 80, planning before you retire (between the ages of 50 and 60) can be beneficial. For instance, if you plan on self-funding, it gives you more time to plan and save. Likewise, if you plan on purchasing insurance, you’ll have more affordable insurance options to choose from if you purchase sooner rather than later. In either case, the earlier you plan for your long-term expenses, the better.
Myth #3: Medicare will cover my long-term care expenses.
Medicare only covers a very limited portion of potential long-term care expenses. For instance, it only covers skilled nursing facility care after a qualifying inpatient hospital stay of at least three days, and even then, the benefit is limited to 100 days. Because many long-term care events don’t start with a qualifying inpatient hospital stay and needs can last longer than 100 days, many forms of care aren’t covered. Therefore, we don’t recommend relying on Medicare for long-term care needs.
Myth #4: My friends and family can provide any care I need when I’m older.
While friends and family can potentially provide some help when you’re older, unless they work in nursing or a similar medical field, they may not have the skills needed to provide you with the care you need. Plus, by the time you need help, they may not even live in your area anymore. Thus, banking on having friends and family take care of you is not a strategy that you should count on.
Myth #5: Long-term care insurance will only cover nursing home expenses.
In addition to nursing homes, long-term care insurance typically provides benefits for a variety of care settings including home health care, adult day care and assisted living facilities. However, long-term care insurance policies typically require you to meet certain criteria and then wait a certain amount of time before benefits are paid. In general, you must be diagnosed as chronically ill by a health care provider or have severe cognitive impairment. If you meet this definition, you then must also meet a waiting period, similar to a deductible, which is the period of time (typically 90 days) when you must cover your own costs before benefits are paid.
Overall, while long-term care planning can sometimes be complex, it can be a critical need to prepare for as you approach and live in retirement. Your Edward Jones financial advisor can answer your questions and help you develop and implement a plan to achieve your financial goals.