What Women Need to Know About Long Term Care

According to Fidelity’s Retiree Health Care Cost Estimate, a 65-year old couple (who retired in 2016) will need an estimated $260,000 to cover health care costs in retirement.

This is a six percent increase over the estimate of $245,000 for 2015, and the highest estimate since calculations began in 2002. (Source)


Long Term Care is a Woman’s Issue

Older women are 50% more likely than older men to live in poverty. (Bureau of Labor Statistics)

Since women live longer than men (which means we’ll require more financial assets for retirement), putting long term care coverage in place is a crucial element of a sound retirement plan. In fact, I strongly believe that no retirement plan is complete without long term care coverage in place.

This is especially true for women.

Women generally have much longer stays than men in nursing homes. (Spillman and Lubitz, 2002 as cited in Professor David F. Babbel’s essay: “Lifetime Income for Women: A Financial Economist’s Perspective.” Wharton School, University of Pennsylvania)

One reason for this is that women are generally younger than their husbands and provide compassionate home care for them in their declining years, delaying the time before which they need to be cared for in a nursing home.

Less than 10% of women, on the other hand, have a companion by the time their health declines, and so they seek institutional care at an earlier stage of their declining health. Ironically, in many cases the couple’s financial reserves have already been expended on the husband’s care, leaving little left for the woman. Hence, the need for long term care.

Long term care insurance coverage gives you options in your golden years, and helps you maintain a life of dignity that you may not be able to afford otherwise.

New Ways to Pay for Long Term Care Insurance

These days there are many new hybrid products on the market, making it possible to invest in LTC insurance without the threat of wasting those dollars should you not need it in the long run. These new hybrid products are called asset-based long term care insurance or linked-benefits, because they are linked to other insurance products like life insurance or annuities, which allows you to buy long term care coverage for pennies on the dollar.

For instance, I have a 63 year old divorcee client who doesn’t want to be a burden to her two daughters. So we got her a hybrid policy that was funded with a lump sum premium and will give her access to LTC benefits for her entire life, no matter how many claims she submits. It’s inflation protected and should she never need LTC, the death benefit will go to her daughters, so those premium dollars don’t get lost just because she never needed long term care.

What makes the benefits available for a lifetime is the fact that the policy is linked with a whole life insurance policy. It’s a little pricier, but worth the peace of mind it gives her knowing that if she ever needs long term care, she will be covered for life no matter how many LTC claims she might have throughout her lifetime. She takes comfort knowing that she won’t be a burden to her daughters, and she’ll get the care she needs in the comfort of her own home. I call that sleep-at-night-insurance.

This is just one strategy to obtain long term care coverage. There are a myriad of others available as well, depending on your unique needs.

When Should You Get Long Term Care Insurance?

Since the status of your health will determine your ability to even get coverage, the ideal time to acquire long term care coverage is in your fifties. But some people wait until their sixties. If you have a family history of medical conditions, you’ll want to inquire about coverage sooner.

Long term care insurance is an underwritten product, so getting coverage before any serious medical condition shows up is key to keeping your premiums lower.

What’s the Process for Getting Long Term Care Insurance?

Contact your local health insurance agent and schedule a consultation. Request quotes from top-rated insurance carriers for the best coverage possible with the lowest premiums available.

There is no charge or obligation for this service. You’ll be more informed about your coverage options, and possibly even surprised at how reasonable LTC coverage can be for you.

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