Why Care about Long-Term Care Costs – and Why a Traditional LTC Policy May Not Be Best

Why Care about Long-Term Care Costs – and Why a Traditional LTC Policy May Not Be Best

No wonder so many people are worried about paying for long-term care! Just look at the facts:

• 70 percent of people turning age 65 will likely need some type of long-term care during their lives, according to the Administration on Aging

• Unfortunately, an American reaching age 65 today can expect to incur nearly $140,000 in future long-term care expenses, according to the Centers for Disease Control (CDC).

• Yet, Medicare doesn’t pay for services extending beyond 100 days in skilled nursing facilities.

• In fact, most people who need long-term care reside in private homes and receive their informal care from loved ones, according to the Congressional Budget Office.

• And by the time the youngest baby boomers turn 86, in 2050, the number of available family caregivers is expected to be nearly 60 percent lower than in 2013, according to the AARP Public Policy
Institute.

In light of these types of concerns, some people consider purchasing a traditional, stand-alone long-term care (LTC) insurance policy, designed to pay benefits when qualified expenses occur. Examples of situations in which benefit payment can be triggered include medical certification of a severe cognitive impairment or an inability to perform two of the six activities of daily living (eating, toileting, transferring, bathing, dressing, continence). Far fewer LTC policies are available now than in years past, as many carriers have exited the market. What we have seen in the past is the premiums double about every 10 yrs in a traditional LTC policy. Initially the premiums may be lower than in Life Insurance, but over the lifetime we have seen that people generally pay more in premiums in a traditional LTC policy.

At Pacific Insurance Group we offer life insurance policies with built-in or available living benefit riders for chronic illness. These options are designed to allow the policy holder access to an accelerated portion of the life insurance policy’s death benefit or access to the chronic illness rider which will allow you to use up to 100% of the death benefit. In other words, these products are structured as multi-purpose solutions and may represent the best value for some people.

In addition, if you do not need chronic illness, you will still have the death benefit from the life insurance that will pass on tax-free to your beneficiary. In a traditional LTC policy, if you do not need chronic illness care, there is nothing to pass on. Learn about some of the differences between traditional LTC and chronic illness through life insurance – and why choosing life insurance, in particular, may be the perfect choice to provide access to cash while living. For more information, please reach out to Pacific Insurance Group at www.pacificinsurancegroup.com or 425-246-4222.

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