Peace of Mind: The Benefits of Long-Term Care Insurance

EP 131 - Peace of Mind: The Benefits of Long-Term Care Insurance

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Introduction to Long-Term Care Insurance

So here's the question for today? Do you know how much long-term care costs or who even needs this type of insurance coverage? If not, you don't want to miss today's show. Where we are going to give you the full scoop. On all things. Long-term care insurance.

Welcome to Ask Ralph Podcast

Welcome to the Ask Ralph Podcast, where listening to an experienced financial professional with over 30 years of experience can help you make sense of confusing questions, current headlines, and industry trends about taxes, small business, financial decision making, investment strategies, and even the art of proper budgeting.

Ask Ralph makes the complex simple by sharing his real world knowledge from a Christian perspective with all things financial. Now here's your host, Ralph Estep Jr.

Welcome to our financial Friday show. I'm so glad you chose to join us.

I just want to thank you for listening and even more supporting the program. I'm coming to you from the Estep Farm at the Saggio [00:01:00] Accounting studio . Let me put on my podcaster hat and put down those overalls and let's move that adding machine to the side. Let's get into some financial wisdom from a Christian perspective.

Diving Into Long-Term Care Insurance: What You Need to Know

Today, our hot topic is long-term care insurance. What it is, who needs it, what it covers, how much it costs and the pros and cons. Yes, we got a lot to cover, but I think you're going to really enjoy our discussion today.

I'll start by defining longterm care insurance. It's coverage that helps pay for extended care services. If you become chronically ill or disabled later in life. We're talking help with daily activities like bathing dressing. Using the bathroom and even eating. care can happen at home in assisted living facilities or in nursing homes really doesn't matter.

Don't forget to subscribe to the show and join our email list. You do that at askralphpodcast.com . So you don't miss tomorrow show. We have a great interview tomorrow with Nick Gadaleta . He is the president and [00:02:00] CEO of super service automotive. We dive deep into how to start, grow, and maintain a successful business. It's an interview you don't want to miss.

Well, let's start with today's relevant Bible verse. It comes to us from the book of Proverbs chapter 13, verse 16. It says this. Every prudent man acts out of knowledge. But a full exposes his folly. What a great Bible verse today, when it comes to longterm care, having knowledge about costs. Coverage options and planning ahead is key to making wise choices.

Long-term care differs from regular health insurance in what it covers. And for how long health insurance and Medicare pay for skilled short-term care to recover from accidents, surgery, or illness where long-term care insurance pays for custodial care or longer timeframes. If you aren't able to care for yourself due to chronic conditions, you may have heard this talked about, stay at home insurance or the ability [00:03:00] for your loved one to stay in their home.

So who actually needs this long-term care insurance? Well, that's a great question. The reality is long-term care. Situations can happen to anyone. Your risk increases as you age, of course, about 70% of people over 65 will require some type of long-term care services during their lifetime. I hate to say it folks, but that's most of us, if we're lucky, Now, some people can afford to pay these expenses right out of pocket. If the time comes. But most middle income adults cannot.

Okay.

Understanding the Costs of Long-Term Care

So here's the moment of truth. What does long-term care cost brace yourselves folks? The national average for home health aid services runs over $50,000 a year. That's a ton, a private room in a nursing home, nearly a hundred thousand dollars annually. No one wants to think about needing long-term care, but look at those crazy numbers. Having insurance to cover some costs brings major peace of mind.

So let's get specific. What does long-term [00:04:00] care insurance actually cover? That's a great question. Isn't it. Well, here's the deal. Good policies help pay for care in your home. Assisted living, adult daycare, respite care nursing homes, and more better policies. Cover home modifications, like grab bars and ramps. Just know that policies vary. So again, as I always say, read the fine print folks.

The next logical question is what does long-term care insurance cost?, but that's the million dollar question. Isn't it? Premiums are based on your age. When coverage starts and the benefit amounts chosen. A sample rate for a 55 year old could be 1500 to $3,000 per year for decent coverage by 65, expect closer to 3000, a $5,000 a year. Yes, it's quite an investment. Although paying now beats paying hundreds of thousand dollars out of pocket later, if care becomes necessary.

Pros and Cons of Long-Term Care Insurance

So time for the main event, weighing long-term care insurance pros and cons. This is what you've been waiting for in [00:05:00] this episode. So let's start with the pros.

Number one, it provides protection. Policies provide money to cover care costs. If you're unable to care for yourself.

Number two. And a lot of people think that this is a huge one. Stay at home option. You receive care in a comfortable surroundings in your own home.

Number three family benefit. It's less burden on loved ones to provide that care. If you've got this coverage, you can bring in home health aids or registered nurses.

Another thing it does. Number four is it's asset preservation. You don't spend through your life savings, paying for care. Sounds pretty good, right?

Well, here are the main cons and the biggest one of this is the cost. It's a big expense. Not everybody can afford it.

Number two premiums may increase over time. What you buy today might be more expensive down the road.

You must meet policy definitions for benefits to start. So there are some important benefit triggers that you need to be aware of.

And here is one that I can't stress enough and [00:06:00] that is, there really are no guarantees. Unfortunately, insurance companies do go out of business sometimes.

So as with any major financial decision, you've got to carefully weigh the pros and cons. Think through your health history, your family, health trends, your financial position, Your retirement, outlook and personal care preferences. These will impact of long-term care insurance makes sense for your situation. Had a lot of clients who have had long-term care coverage, some of really benefit from it. I had one individual who she was able to stay in her home and her long-term care paid almost a hundred thousand dollars a year for her to remain in her home. She had 24 hour care.

Making the Decision: Consulting and Planning

So what do you do? You consult a fee only financial planner. If you're unsure. At a minimum have open discussions with your family on which is an options for care later in life. This is something you want to talk about with your loved ones.

Recap and Closing Thoughts

So let's do a bit of a recap. In this episode, we defined longterm care insurance and who needs the coverage. We revealed the shockingly high [00:07:00] annual cost for long-term care today. We reviewed what good policies cover along with weighing the pros and cons of getting this type of insurance, the goal being more financial knowledge and proactive planning to make wise money moves. And that's what we all want to do.

Well, I hope this overview gives you knowledge to make prudent financial choices. Should long-term care needs arise. Visit askralphpodcast.com for more money saving tips with an eternal perspective, please share this episode. If you found it helpful, let's keep the conversation going on this important topic.

Now go out there, get savvy with every dollar. And God bless you today.

Thank you for joining us on the AskRalph podcast. And with a simple click to subscribe, we'll invite you back to our next episode. And remember, financial issues don't have to be complicated. Just AskRalph. The information contained in this episode of AskRalph is based on data available as of the date of its release.

Saggio Accounting Plus and AskRalph Media Inc. is under no obligation to update [00:08:00] this content if changes occur. Applying this information to your specific situation requires careful consideration of all facts and circumstances, and any information provided is not to be considered as financial, tax, or legal advice.

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