Is long-term care insurance worth the price?
Getting sick or having a long-term illness is something that a lot of people fear because they have seen it happen to their parents or family members. The 2023 national average for a semi-private room at a nursing home is $100,740 a year, and the cost of a six-hour visit by a home health aide visiting five days a week averages $32,760 a year.* Those numbers can be pretty scary to think about, but you have more options than you think for funding services.
During phase one of financial planning, your financial professional should ask you about long-term care planning and whether or not you’ve thought about it. This is in no way a pitch to sell long-term care insurance, simply your advisor doing their due diligence to eliminate the risks to a sound retirement.
While there is nothing wrong with traditional long-term care insurance, our firm is unique in that we look for alternative ways to fund this liability because I personally believe that you don’t want to pull away from the building blocks of your portfolio. Traditional long-term care insurance has no interest rate, and if you do get to a nursing home and stay there for a year, the rest of the money you invested doesn’t come back to you or your family. It goes instead to the insurance company.
In my opinion, if someone tells you to buy something, you should get to use it. In the world of long-term care, this is not a pleasant thought. In my experience, the average long-term care policy pays out $3,000 a month while the average nursing home costs nearly $8,000 a month. I believe you deserve better coverage and more options.
Asset-based long-term care funding gives you access to what’s yours. Your money still grows at an average of five to six percent, there is an income stream available should you go into confinement, and capital is available for your spouse to use. Best of all, should you use care for a very short period of time or not all, the money stays with your family.
Even folks who have a few bumps or bruises can qualify for this type of asset-based insurance—there is no physical, and some options have no underwriting. If you are worried about qualifying because of your health, then you owe it to yourself to educate yourself about these asset-based options. Ask your financial professional if asset-based solutions are right for you.