Long-Term Care for the Ones You Love

In an instant, your life can change. If you — or a loved one — suddenly needed round-the-clock health care, would you have the funds to pay for it? For most Americans, the answer is no.

With 70 percent of seniors needing some form of long-term care assistance before they die,1 your chances of caring for an aging parent or spouse are high. And with the average nursing home stay costing $50,000, 2 being responsible for that care can easily undo years of careful financial planning, wiping out your retirement savings and even putting you into debt.

That's why we thought it was important to share more information with you about long-term care insurance. Read on to find out how it can help you and your loved ones stay financially secure in the years ahead.

What is long-term care insurance?
While health insurance may cover initial healthcare costs and Medicare may cover some expenses during the first 100 days of extended care, neither are usually enough to cover the high cost of caring for someone who needs constant attention due to a chronic or disabling condition.

Long-term care insurance is specifically designed to cover care for people who are unable to handle basic daily living activities such as eating, drinking, walking, dressing and bathing.

As with other types of insurance, every policy is a little different. But you can generally find coverage for services in a variety of settings, including your home, adult day care center or nursing home.

How does it work?
Again, it depends on your individual policy. Typically, though, when the policyholder loses the ability to perform two or more daily activities, the insurance begins to pay a set amount per day until the policy runs out of benefits.

For example, if you spend $200 a day on a full-time caregiver, your long-term care policy might pay up to $150 a day of that until you've spent a predetermined amount worth several year's worth of care.

Do I really need a policy?
Looking at your and your loved one's family medical histories can help you determine whether or not long-term care is likely to be necessary. However, regardless of what you find, most financial advisors agree that the cost of the monthly premium is worth it. After all, burning through your nest egg to care for a parent or spouse puts your entire financial situation at risk.

One final note: As with life insurance, it's easier to get an affordable policy when you— or your loved ones — are in good health. So if you're considering purchasing a policy for an aging parent, doing so before they start to seriously decline is your best bet.

For more information about long-term care insurance and how it fits into your financial planning goals, contact your Fifth Third Private Bank advisor.

1. "What You Need to Know About Long-Term Care Insurance," by Kathy Kristof, posted June 18, 2014, CBS Interactive, Inc., http://www.cbsnews.com/news/who-needs-long-term-care-insurance/, accessed Jan. 26, 2015

2. "You'll likely need long-term care, but how will you pay for it?" by Elizabeth Renter, Oct. 28, 2014, U.S. News & World Report, http://health.usnews.com/health-news/health-insurance/articles/2014/10/28/youll-likely-need-long-term-care-but-how-will-you-pay-for-it, accessed Jan. 26, 2015