What is Long-Term Care (LTC)?

Long-term care (LTC) is a variety of services which help meet both the medical and non-medical needs of people with a chronic illness or disability who cannot care for themselves for long periods. (Wikipedia)

Long-term care covers a range of services and supports you may need to meet our personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs), such as: Bathing, Dressing, Using the toilet, Transferring (to or from bed or chair), Caring for incontinence, Eating.

According to longtermcare.acl.gov, more than 70% of Americans of 65 years or older and 37% of those of younger than 65 years old will be in need of Long-Term care, but only 22% have LTC plans...

According to the United States Census Bureau, people in the United States are living longer, only 100,000 peole are living 85 years or older in 1900, but it was 4.3 million in 2000 and by 2050, the number can become 19 million; so disease due to aging are becoming more serious than ever before. 

However, very little people know that most of the health, medical or disability insurance, including medicare do not cover  LTC expenses; and most of the life insurance policies do not cover long-term care expenses either, unless specifically included the LTC rider at the time of policy application.

Medicaid insurance does cover LTC, but we have to spend down all of our assets to be eligible, and there is a 5-year look back period...

Who Needs LTC?

For average Americans turning into 65 years old, 70% may have a good chance in need a LTC sooner or later; and even for those younger than 65 years old, 37% may still have a good chance for LTC need in their life time.

Let's compare the risk of needing LTC insurance against the odds of needing home owner insurance.

On average, only 1/1200 of American families may lose their home in a fire, but 96% of families have home owner insurance; while 70% of American may need LTC coverage, but only 22% have planned for LTC in retirement. 

Ironically, an average we are 840 times more likely in need a LTC coverage than to lose our home in a fire.

Another bad news, the cost of LTC is also going up every year. 

According to the longtermcare.acl.gov, the national average of LTC cost is $92,378/year in 2016, and by 2046, this number can be as much as $224,226/year.

For those  of us who are currently living in the Bay area, the cost of LTC is doubled. 

Now, a lot more retirees have little or no confidence they have enough money for nursing homes and other long-term care; twice as many retirees requiring long-term care in the last five years said the expense was much higher than expected compared to the elderly who haven’t needed the intense medical assistance. (Forbes.com)

Well, no one can predict what will happen in the future, but we really don't want to cast the burden to our loved ones, right? 

As we all noticed, Americans are living longer and longer, and the chance of needing a LTC coverage is also getting higher and highers.

If we are healthy, the price for a decent LTC insurance will be quite reasonable; we can cover our LTC expenses if we ever need and the remaining of the balance can still be passed to the beneficiaries if there are any left overs... 

Even if we are not as healthy, it does not hurt to give it a try, we may still be able to get a some coverage, rather than pass  the burden on to our loved ones.

However, not everyone is eligible for LTC insurance, most of the insurance companies only cover healthy adults; plus, the premium of a LTC policy goes up with age, so it will be more economical, if we can get a policy when we are young. 

On the other hand, due to the uncertain cost of paying future claims as well as low interest rates since the 2008 recession led to the mass exodus from the market, the number of insurance companies selling long-term care insurance has plummeted since 2000. More than 100 insurers were selling policies in the late 1990s, but less than a dozen are still accepting LTC applications. (nerdwallet.com)

As a financial consultant, I would highly recommend a LTC insurance for everyone who still has the capacity, before the insurance companies increase the premium or stop accepting new applications. 

Remember, for certain programs, premium can also accumulate interest, which will be available to be used when needed; if the policy is never used before the insured pass away, the entire premium plus interest will be passed on to the beneficiaries; some other program may also have a return of premium without any penalty; while other programs may have unlimited monthly benefit...