Your Guide to Long-Term Care Planning and Insurance
Most of us need help getting around eventually. If we're lucky, a little help from family is enough to maintain independence as we age. But when it comes to long-term care planning, we can't afford to count on luck alone.
Will You Need Long-Term Care?
It's impossible to know precisely how much help you'll need when you're older, but your health and genetics hold some clues. Genetic risk factors for requiring long-term care include gender and family history. Women, people who live into their 80s and beyond, and people with family histories of chronic health conditions are more likely to need care as seniors.
Your health and lifestyle choices also play a role. Chronic health problems in middle age are likely to worsen without serious intervention. If your lifestyle includes poor diet, sleep, exercise, and substance use habits, you're at risk of developing additional health problems as you age.
Even if the odds aren't in your favor, there are things you can do to reduce your risk of needing care or minimize the amount you need. Even one or two fewer years of care could amount to savings in the six digits.
Advice for good health doesn't change much as you grow older. If you eat a balanced diet, exercise a few hours per week, and abstain from smoking and substance abuse or misuse, you're more likely to maintain good health. However, there are some things older adults should pay more attention to, like the importance of a safe, fall-proof home, keeping up with preventive care, and staying socially active in a community.
Adopting a safe and healthy lifestyle is the best thing you can do to reduce long-term care needs, but even the best habits can't eliminate the possibility of needing paid care. That's why it's so important to financially prepare for long-term care.
How Will You Pay for Long-Term Care?
Paid care isn't cheap, regardless of whether it's provided at home or in a facility. That doesn't mean you can't use insurance to defray long-term care expenses. Long-term care insurance is one product you can buy to spread out costs over time. Unfortunately, long-term care insurance isn't cheap, either: Rising premiums, waiting periods, and strict benefit limits have dissuaded many adults from investing in it. If you're worried about spending money on an insurance policy you may never use, consider a hybrid life-LTC policy. With a hybrid policy, you can use your benefits for long-term care if you need them or hold onto them for a death benefit if you don't.
Seniors who lack long-term care insurance or enough funds to self-insure face difficult decisions when they need long-term care. But even then, it's not hopeless. If you find yourself needing care with no way to pay for it, consider these options:
● Downsizing: If your home is paid off and your local housing market is strong, downsizing and selling a home could pay for several years of care. Before making the decision to list your home, research the local market to see if the potential proceeds are worth it.
● Apply for a reverse mortgage: If selling isn't an option, a reverse mortgage provides a steady stream of income, and it could be enough to pay for caregiving.
● Tap into life insurance: Depending on your specific life insurance product, you may be able to withdraw funds, take a loan, or surrender your policy for cash.
No one wants to think about growing ill or disabled when they're older, but if you don't, your health is at even greater risk. If you want to age confidently, knowing you can afford the care you need, it's time to face the tough topic of long-term care planning.
Image via Unsplash