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Plan Ahead | Long-Term Care Insurance

Plan Ahead | Long-Term Care Insurance

July 27, 2023

Long-term care insurance (LTCI) helps pay for long-term care services, such as nursing home care, assisted living, or home health care. LTCI can provide financial security and peace of mind if you need long-term care, as it can help cover the cost of these services, which can be very expensive.

The national monthly average costs of long-term care vary depending on the type of care and the location. According to Genworth's 2023 Cost of Care Survey, the following are the national monthly average costs of long-term care:

  • Nursing home care: $9,034 for a private room and $7,908 for a semi-private room.
  • Assisted living: $4,500 for a one-bedroom unit.
  • Home health care: $4,385 for a home health aide.
  • Adult day care: $1,612 per day.

To qualify for long-term care, you would need assistance for two or more activities. Activities of daily living (ADLs) are the basic self-care tasks that people need to do daily to live independently. The six standard ADLs are:

  • Bathing
  • Dressing
  • Toileting
  • Transferring (getting in and out of bed or a chair)
  • Eating
  • Continence (managing bladder and bowel functions)

LTCI policies typically use ADLs as a way to determine eligibility for benefits. In most cases, you'll need to be unable to perform at least two ADLs without assistance to qualify for benefits. For example, if you cannot bathe yourself or get in and out of bed without help, you may be eligible for LTCI benefits. 

As your financial advisor, we will look at LTCI as a consideration in your financial and retirement planning. Doing so can offer you the following.

  • Peace of mind. LTCI can help you feel more secure about your financial future if you need long-term care. You won't have to worry about how you'll pay for these services, which can be a considerable burden.
  • Financial security. LTCI can help protect your assets if you need long-term care. Without LTCI, you may have to sell your home or other assets to pay for these services.
  • Tax benefits. In some cases, LTCI premiums may be tax-deductible.

If you're considering LTCI, work with our LPL Financial Advisors to find the right policy. Dixon Financial Group, LLC advisors can help you assess your needs, compare policies, and find the most suitable plan. Together we will consider the following factors:

  • Your age. The younger you are when you purchase LTCI, the lower your premiums will be.
  • Your health. If you have any health problems, you may have to pay higher premiums for LTCI.
  • Your financial situation. You'll need to ensure you can afford the premiums for LTCI.
  • The type of care you want. LTCI policies come in various forms, so you must choose one that covers your desired care.

Long-term care insurance is a complex product, and we want to help make the decision as easy as possible. Contact us today with any questions.

Please share this information with family and friends.

David S. Dixon, CFP®

Jacob S. Bierstedt, CFP®, ChFC