The holidays are quickly approaching, a season when we spend more time with friends and family, reflect on the year past, and plan for the one ahead.
November is Long Term Care Awareness month, and it’s a good time to consider the importance of having a plan for care, if care should be needed in the future. This may include long-term care insurance in your wealth strategy.
For Americans turning 65 today, there’s an almost 70% chance they will need long-term care at some point in their future, according to the U.S. Department of Health and Human Services.
Long-term care is not a condition, or a place, but a life-changing event that could have devastating consequences to your loved ones and your ability to keep financial promises. A plan of care can take many different forms. It may mean reaching a point where part-time, in-home help from a professional aide is needed. Or it may require moving to a live-in facility to cover the basics of daily living, or to receive skilled nursing care for serious physical or cognitive issues or chronic illnesses.
In addition to the obvious emotional toll on families, the financial costs can quickly add up depending on how long you or your loved ones need care, the level of care required, and where you live. Nationally, the average cost of a private room in a nursing home is nearly $8,000 a month. For those wanting to continue living at home, in-home health aides average approximately $20 an hour. Many health insurance policies don’t comprehensively cover long-term care expenses, and contrary to conventional knowledge, government programs provide only limited coverage. Without adequate planning for long-term care needs, even high net-worth individuals can be taken off track by a health event, requiring an unexpected change in their or their spouses’ care needs.
It’s possible you may never need long-term care services, but if you did, how would your family be affected by a sudden, unplanned need to shift resources toward your care?
Here are four useful questions to consider:
- How would the need for long-term care affect your plans for taking care of your family’s future generations?
- How would it impact your ability to take care of a surviving spouse and/or children?
- If you’re a business owner, how would it affect your plans for protecting the family business?
- How will decisions involving your care impact family dynamics?
Long-term care planning can help preserve wealth against future, unforeseen health-related events. It also enables you to think through care scenarios so you can maximize your independence for as long as possible and reduce the financial and emotional burden on family members. And long-term care insurance allows someone to be a companion, not a caregiver. There’s a big difference.
However, as of 2014, only one in four of those people 65 and older with more than $1 million in assets have long-term-care insurance, according to research from the Urban Institute.
At Bank of the West, we work with clients on personalized wealth management strategies no matter what stage they are in the wealth journey – from accumulation to protection to transfer.
If you’re ready to incorporate long-term care planning into your wealth strategy, please contact us for a conversation about what’s right for you and your family.
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