I wrote an article not that long ago about long-term care insurance and was blown away by the costs of long-term care. When we talk about personal finance, long-term care must become a part of your planning. If it's not, wow, you could really wreck everything you've worked toward.
Depending on where you get care, the geographic location of care and the level of care you need, the monthly median costs of a semi-private room in a nursing home facility amount to $7,756. It costs $8,821 for a private room, according to the Genworth Cost of Care Survey.
According to Genworth, the world’s population has aged at a faster rate than ever before, and people continue to live longer. Ten thousand Baby Boomers will turn 65 every day until the year 2030. Seven out of 10 people will require long-term care in their lifetime.
If you're inching closer to middle age and haven't considered getting long-term care insurance, you might want to think about it. You don't want to deplete your nest egg due to the very real possibility that you might have to get nursing home insurance in the future.
What is Long-Term Care Insurance?
Long-term care insurance helps pay for the cost of care facilities. This can include costs at a nursing home, assisted living facility or in-home care through a home health aide.
Why Buy Long-Term Care Insurance?
The possibility of you not being able to button your shirt or brush your teeth may seem so remote, particularly if you're young and healthy right now.
However, the reasons to get it can stack up pretty quickly. You:
- Want to protect your carefully saved nest egg (remember how many years it took for you to build that up?)
- Might not have saved enough in the first place.
- Don't want to have to rely on your children to take care of you.
- May not want others to pay for your nursing home costs.
- Can choose where to leave your assets instead of spending it on a care facility, such as to your heirs or to a favorite charity.
- Can better plan for the future because you have an array of options at your fingertips.
Finally, the biggest reason to get long-term care insurance: Health insurance doesn’t cover long-term care and neither does Medicare. Medicare will only cover short stints in a nursing home after a health incident or when you require skilled nursing care or rehabilitation. You can't depend on either to take care of you in a long-term situation.
Ultimately, you want to have a range of options available to you, and getting and continuously paying for long-term care insurance can give you that.
However, note that you can't purchase long-term care insurance when you're 85 and suddenly need it — no insurance company will grant you insurance. Many people get long-term care insurance in their 50s or 60s.
What is the Cost of Long-Term Care Insurance?
The amount you'll pay for long-term care insurance per month depends on a few factors, including:
- Your age and health: The younger you are and the fewer health problems you have, the less you'll likely pay for long-term care insurance. You want to try to get long-term care insurance when you're younger.
- Your gender: Obviously, this is one thing you really can't control, but women usually pay more for long-term care insurance than men because women live longer. They have a higher chance of making long-term care insurance claims.
- Whether you're married or single: Married people pay less than single people for long-term care insurance.
- Type of coverage: Depending on the type of coverage you choose, you can pay more or less for coverage. For example, if you choose higher limits on the daily and lifetime benefits, cost-of-living adjustments to protect against inflation, shorter elimination periods, and fewer restrictions on the types of care covered.
Insurance company: Prices for the same amount of coverage will vary among insurance companies. That’s why it’s important to compare quotes from different carriers.
How to Shop for Long-Term Care Insurance
Take a look at the following steps for shopping for long-term care insurance.
Step 1: Pinpoint the right age to look into long-term care insurance.
You want to look for long-term care insurance when you're younger — not 85. The optimal window to look for coverage lies between the ages of 60 and 65, according to AARP because people older than 70 file more than 95% of long-term care insurance claims. In addition, people older than 81 file seven in 10 claims, according to AARP and the American Association for Long-Term Care Insurance.
At the very latest, decide on your plans by age 65.
Step 2: Determine how much care you may need.
Okay, that's a tall order. You have no idea whether you'll get Alzheimer's at some point in your life or whether you'll always be able to take care of yourself.
However, you may want to consider the costs of long-term care based on the potential costs in your area, then determine how much you can bring to the table with your retirement income and savings — if you want to include a percentage of your personal savings. You might want to consider buying just enough to fill the "gaps."
Step 3: Shop around.
Don't be shy about comparing prices and getting quotes from several companies. You can go directly to the source — the insurance company — or get an agent to help you. You can also ask your human resources office at work whether you can tap into long-term care coverage through your job.
Compare prices from at least three carriers because costs can vary widely.
Step 4: Evaluate different types of insurance.
Take a look at the different types of long-term policies to figure out which works best for you.
- Traditional long-term care insurance policies: Traditional coverage allows you to choose your coverage type, how long it lasts and the length of time you have to wait before you can get benefits. Ask about whether your annual premium will increase if you choose this benefit. Also, you can only use this type of coverage for long-term care.
- Hybrid policies: A hybrid policy takes care of your concerns of buying coverage you might never use. In other words, if you manage to take care of yourself up until you're almost 100 and live in your own home, you may "waste" the money you spend on long-term care insurance premiums for years. Hybrid policies allow your loved ones to gather a death benefit when you die if you never need the policy for a nursing home or assisted living.
Get the Right Option for You
Now that people live longer on average, it's a solid idea to opt for a long-term care policy. You want to prepare yourself for every eventuality, even if you feel great right now.
Just make sure you get a long-term care insurance policy earlier rather than later — in your 50s or 60s — so you can actually get a policy. It can save you hundreds of thousands of dollars later on in life and preserve your wealth for future generations. Let yourself snag your own dividends — don't let an assisted living facility be the only recipient of your hard-earned money.7 Retailers That Are Bucking the E-Commerce Trend
Once again it appears that the death of brick and mortar retail appears to be exaggerated. First-quarter earnings are showing that many retailers that rely on in-person traffic for a considerable chunk of their business are seeing a rebound in sales. And many are planning to open stores in 2021.
This isn’t to say that e-commerce is going away. In fact, a common feature for many of these stocks is that they either developed or enhanced their digital footprint during the pandemic.
This special presentation focuses on retailers that are planning to add to their brick-and-mortar footprint in 2021. And some are planning to do so by a substantial margin. Once again, this doesn’t signal a transformative shift in the overall trend, but it does mean that for the foreseeable future, brick and mortar will have some relevance.
View the "7 Retailers That Are Bucking the E-Commerce Trend"