There are several reasons to consider long-term care insurance.
First, long-term care services can be expensive.
Second, because Americans are living longer, there's a greater chance that you or your spouse may need long-term care at some time in the future.
Third, a comprehensive long-term care insurance policy can provide both emotional and financial benefits. If you need long-term care, it can help you:
- Stay at home longer
- Maintain your freedom of choice
- Protect your savings and other assets
Staying at home
You're probably planning to stay in your home as long as possible. The right long-term care insurance can help you do just that.
You also can rely on outside caregivers to help relieve friends and family members the burden of providing or paying for care.
Depending on the type of Long-Term Care Insurance policy you choose, custodial or informal caregivers including friends or neighbors, may also care for you in your home and receive reimbursement for providing care.
Financial security
Long-term care insurance can help you protect your retirement assets and savings from the high cost of long term care services. The assumed average stay in a nursing home is 2.5 years.2 At an average cost of $70,912 a year1, that could add up to $177,280 or more.
The average length of time for informal or custodial care in the home is 4.3 years.3 Using today's average cost of $22.15 per hour for a licensed but noncertified home care provider,1 that equates to an average cost of $46,072 per year for 40 hours of help per week. Multiply $46,072 by 4.3 years, and you could be looking at an average cost of $198,110 or more for home care.
If it's necessary to pay out of your pocket for nursing home care or home care, you could quickly deplete your savings and retirement funds. Recent research into the cost of long term care suggests that one in every three Americans could significantly decrease their savings paying for long-term needs during the golden years of retirement.7
Without proper planning, unexpected healthcare costs can quickly erode a lifetime of savings and undermine a family's retirement dreams.
Freedom of choice
Long-term care insurance can give you the flexibility to be involved in the decisions about the type of care you receive and where you receive it. If staying at home is important to you, you may have that option. If you want to live in a facility near a relative, you may be able to choose the location.
Tax advantages
The Health Insurance Portability and Accountability Act (HIPAA) says that you may be able to include part of the premiums you pay on a tax-qualified long term care insurance policy as a medical expense deduction on your income taxes.
The tax information in this material was written to support the promotion and marketing of the contract. The Genworth Financial companies and their representatives and distributors do not provide tax or legal advice. We did not write this material for use by any taxpayer to avoid any Internal Revenue Service penalty. You should ask your independent tax and legal advisors for advice based on your particular situation.
1. Based on rates for a private nursing home room and a Home Health Aide from a non-certified but licensed agency. Genworth Financial 2007 Cost of Care Survey. Conducted by CareScout, an independent research firm. 03/07.
2. National Nursing Home Survey, National Center for Health Statistics, U.S. Department of Health and Human Services, June 2002. While 2.5 years is the average length of stay for all nursing home residents, the study indicates that of the residents who remain in nursing homes for more than 3 months, 30% are there 3 months to 1 year; 37% for between 1 and 3 years; and 33% for 3 or more years.
3. "Caregiving in the U.S." National Alliance for Caregiving and AARP. 2004. Individuals receiving informal or custodial care may not qualify for long term care insurance benefits for this time period unless they meet benefit eligibility requirements.
4. Life Plans Survey. 12/05. Long Term Care Individual and Group Association Top Writers Survey Results. Based on number of individual policies sold in 2004 and individual policies in force as of 12/31/05.
5. Standard & Poor's (AA-/Very Strong/4th highest of 21 ratings) ratings: These ratings reflect the company's claims paying ability. All ratings shown are current as of 12/31/05. Rating shown reflects the opinion of the rating agency and is not an implied warranty of the company's ability to meet its contractual obligations.
6. Genworth Life Insurance Company Business Operations as of 12/31/06.
7. National Governors Association Research Initiative "A Lifetime of Health and Dignity" presented 7/04.
