Long-Term Care Options Have Evolved

As baby boomers age, families have more options for providing and paying for their care. Much has changed in the past two decades when it comes to long-term care options and how to fund them. Baby boomers and subsequent generations will need to plan for long-term care in a different way than their parents in light of factors such as longer life spans, the uncertain future of entitlement benefits, and rapidly rising medical costs. Choices when it comes to planning for long-term care include earmarking savings for long-term medical expenses, relying on entitlement benefits, or depending on their families. Long-term care insurance is another option for aging clients to consider because insurance products have evolved along with current trends and care options. Unlike many policies in the past that directly paid a nursing facility, many current policies pay the benefit to the insured. In fact, half of benefits paid by private insurers for long-term care are not for skilled nursing care, but rather for care in the home or assisted-living care. Most long-term care policies will pay whether the recipient is at home, under lower level custodial care such as in an assisted-living facility, or in a nursing home receiving skilled care.

Increased longevity and medical advances have created more demand for long-term care and this need is even more profound for female clients: about two-thirds of Americans over 85 are women, and almost half of this group has some form of cognitive impairment. Advanced benefit riders are fairly inexpensive additions to a life insurance policy that allow the death benefit (often up to 90 percent) to be paid in advance of death if the funds are needed for long-term care. Whatever amount is advanced to the insured is simply deducted from the death benefit when that person dies.

Source/more: Investment News

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