Why do I need long-term care insurance?

In my already long career in the Life Insurance Business, it is recently that I have acknowledged Long Term Care Insurance Policies and why they are in the Market.

Not because I didn't know they existed but because I didn't see the value involved.

As we grow older, knowing that now we are living more years (but not necessarily healthy) we have to confront our parents' aging, the financial cost involved, the time invested in the care of a beloved one, the emotional cost, and family conflicts created as a consequence of the caring process that most of the time survive the love one for longer that we desire.

It was an eye-opener for me, I started to realize my own aging process, my needs, and my resources in case I need to be cared for when I can't do it for myself.

Long-Term Care (LTC) insurance is an important but often overlooked aspect of financial planning, even among people with deep pockets.

Let me break down what I learned therefore:

The main reason LTC policies are on the market is mainly due to the increasing demand for care services as people live longer.

The U.S. (and many other countries) have aging populations, and many people will eventually require help with activities of daily living (ADLs), such as dressing, bathing, or eating, due to chronic illness, disability, or cognitive decline (like Alzheimer's). These services can be very expensive, especially when they need to be provided for a long period.

Long-Term Care (LTC) insurance is an important but often overlooked aspect of financial planning, even among people with deep pockets.

Let me break down what I learned therefore:

The main reason LTC policies are on the market is mainly due to the increasing demand for care services as people live longer.

The U.S. (and many other countries) have aging populations, and many people will eventually require help with activities of daily living (ADLs), such as dressing, bathing, or eating, due to chronic illness, disability, or cognitive decline (like Alzheimer's). These services can be very expensive, especially when they need to be provided for a long period.

Without LTC insurance, people often end up using their savings or assets to pay for this care, which can deplete retirement funds quickly.

The Burden of Family Caregiving

LTC insurance is also marketed as a way to reduce the burden on family members. Many people underestimate how exhausting and challenging it can be to provide full-time care for an elderly or ill relative. When you’re in a caregiving role, it can affect your financial situation, career, and overall quality of life. LTC insurance helps by providing financial support for professional caregivers, whether in-home care or in assisted living/nursing home settings.

And to be honest, in my opinion, it is not fear to let this extremely heavy burden to our kids, husband or wife.

Health Insurance & Medicare Limitations

Many people mistakenly think that traditional health insurance or Medicare will cover long-term care, but they don’t. Health insurance and Medicare typically only cover short-term care or medical treatments, not custodial care or services like nursing home stays for chronic conditions. Medicaid can cover LTC in some cases, but it only kicks in after you’ve spent down your assets to a very low level, which is not ideal for most people.

Protecting Your Retirement Assets

LTC insurance helps preserve your retirement savings and ensures you don’t have to liquidate assets or dip into retirement accounts (which may be taxed) to pay for long-term care. For people who have spent decades saving for retirement, this protection becomes essential.

Peace of Mind

Ultimately, LTC insurance provides peace of mind. You don’t want to worry about becoming a financial burden to your children or loved ones as you age. It allows you to plan ahead, ensuring that if you ever need care, you have the means to get it without jeopardizing your financial future or your family's well-being.

And last but definitely not least, IT IS NOT AS EXPENSIVE AS I THOUGHT IT WILL BE. Are options for every need, time is key, the sooner we get it, the sooner we’ll collect the necessary funds at a lower price.

Feel free to contact us if you need some guidance or more information related to this topic.

Dr. Marcos Levy

Financial Professional