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How LTC Insurance Can Help Protect Your Assets

By MidAmerica Financial Resources


LTC Insurance Can Help Protect Your Assets


a pool of healthcare dollars that will grow in any market.


Provided by MidAmerica Financial Resources


How will you pay for long term care? The

sad fact is that most people don’t know the answer to that question. But a

solution is available.


As baby boomers leave their careers

behind, long term care insurance will become very important in their financial

strategies. The reasons to get an LTC policy after age 50 are very compelling.


Your premium payments buy you access to a large pool of money which can

be used to pay for long term care costs. By paying for LTC out of that pool of

money, you can preserve your retirement savings and income.


The cost of assisted living or nursing home care alone could motivate

you to pay the premiums. Genworth Financial conducts a respected annual Cost of

Care Survey to gauge the price of long term care in the U.S. Here is a summary

of the 2013 survey’s key findings:


*In 2013, the median annual cost of a private room in a nursing home was

$83,950 or $230 per day – up 3.6% from 2012. In the past five years, the cost

has risen about 4.5% annually.

*A private one-bedroom unit in an assisted living facility has a median

cost of $3,450 a month, or $41,400 annually. It was 4.5% cheaper last year.

*The median payment to a non-Medicare certified, state-licensed home

health aide is $19 an hour in 2013, up 2.3% from 2012.1


Can you imagine spending an extra $40-85K out of your retirement

savings in a year? What if you had to do it for more than one year?


The U.S. Department of Health & Human

Services estimates that about 70% of Americans will need some kind of long term

care during their lifetimes. Additionally, 69% of Americans older than 90 have

some form of disability – often a direct cause for long term care.2


Why procrastinate? The earlier you opt for LTC coverage, the cheaper the

premiums. This is why many people purchase it before they retire. Those in poor

health or over the age of 80 are frequently ineligible for coverage.


What does it pay for? Some people think LTC coverage just pays for nursing

home care. That’s inaccurate. It can pay for a wide variety of nursing, social,

and rehabilitative services at home and away from home, for people with a

chronic illness or disability or people who just need assistance bathing,

eating or dressing.3


How much

will your DBA be? DBA stands for Daily Benefit Amount - the maximum amount that your

LTC plan will pay per day for care in a nursing home facility. You can choose a

Daily Benefit Amount when you pay for your LTC coverage, and you can also

choose the length of time that you may receive the full DBA on a daily basis.

The DBA typically ranges from a few dozen dollars to hundreds of dollars. A

small number of these plans offer you “inflation protection” at enrollment,

meaning that every few years, you will have the chance to buy additional

coverage and get compounding - so your pool of money can grow.


Medicare is not long term care insurance. Some people think Medicare will pick up the cost of

long term care. That is a misconception. Medicare will only pay for the first

100 days of nursing home care, and only if 1) you are getting skilled care and

2) you go into the nursing home right after a hospital stay of at least 3 days.

Medicare also covers limited home visits for skilled care, and some hospice

services for the terminally ill. That’s all.4


Now, Medicaid can actually pay for long term care – if you are

destitute. Are you willing to wait until you are broke for a way to fund long

term care? Of course not. LTC insurance provides a way to do it.4


Why not look into this? You may have heard that LTC insurance is expensive

compared with some other forms of coverage. But the annual premiums – in the

vicinity of $2,000-2,500 for the typical policy right now – are cheap compared

to real-world LTC costs.3


Ask an insurance or financial professional about some of the LTC

choices you can explore. While many Americans have life, health and disability

insurance, that’s not the same thing as long term care coverage.


MidAmerica Financial

Resources may be reached at 618.548.4777 or greg.malan@natplan.com.



This material was prepared by MarketingLibrary.Net Inc., and does

not necessarily represent the views of the presenting party, nor their

affiliates. All information is believed to be from reliable sources; however we

make no representation as to its completeness or accuracy. Please note -

investing involves risk, and past performance is no guarantee of future

results. The publisher is not engaged in rendering legal, accounting or other

professional services. If assistance is needed, the reader is advised to engage

the services of a competent professional. This information should not be

construed as investment, tax or legal advice and may not be relied on for the

purpose of avoiding any Federal tax penalty. This is neither a solicitation nor

recommendation to purchase or sell any investment or insurance product or

service, and should not be relied upon as such. All indices are unmanaged and

are not illustrative of any particular investment.



1 - www.genworth.com/dam/Americas/US/PDFs/Consumer/corporate/131168_031813_Executive%20Summary.pdf


2 -

longtermcare.gov/the-basics/who-needs-care/ [3/18/13]

3 -

www.marketwatch.com/story/long-term-care-coverage-worth-the-price-2012-12-04 [12/4/12]

4 - www.medicare.gov/longtermcare/static/home.asp



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