Long-Term Care Myths and Facts

"I'm too young to need Long-Term Care insurance."
A lot of us think that only senior citizens need to worry about Long-Term Care, so we put off preparing for the possibility. Unfortunately, untimely accidents or illnesses can strike at any age. Forty percent of the 12 million Americans receiving Long-Term Care are between the ages of 18 and 64. (1) The truth is people of any age can develop serious conditions that require assistance with routine daily activities.

Further, Long-Term Care insurance premiums are based on your age at the time you apply for coverage, so the premium you would pay goes up with each birthday. Studies show that if an individual waits until age 79 to purchase a policy, the premiums are typically about six to 10 times higher than if the policy was purchased at age 50. (2)

Once you’ve purchased Long-Term Care insurance, the insurer can only raise your premium on a class basis — not because of your age or health.

Another fact to remember is that you must be healthy to be eligible for Long-Term Care insurance. Once your health begins to deteriorate or you suffer a debilitating accident, you may no longer be able to qualify for coverage.

1 "A Guide To Long-Term Care Insurance," Health Insurance Association of America, 2003

2 “Long-Term Care Insurance: Better Information Critical To Prospective Purchasers,” U.S. General Accounting Office, Sept. 13, 2000

"If I live a long time, I may need Long-Term Care services."
The truth is today's medical advances make it very likely that you will survive well into your 80s. (2) The longer you live, the more likely you will need LTC services.

Consider this: there is a 1-in-1200 risk of having a fire that will cause major damage to your home. A 1-in-240 risk of having an accident that will destroy your car. Compare those statistics to the 1-in-3 risk that the average person will spend 2.9 years in a nursing home. (3)

Ironically, most people insure their cars and their homes, but not the cost of a nursing home stay — the risk that’s most likely to occur.

3 The 9 Steps To Financial Freedom: Practical and Spritual Steps So You Can Stop Worrying, Suze Orman, Dec. 1, 2001

"My family will take care of me."
This might have been a reasonable assumption years ago when grown children often lived near their parents and women stayed at home. In today's society, children may live across the country or around the globe. And many women are active in the workforce, with less time to fulfill their traditional caregiver role.

"I already have major medical and disability insurance. I don't need Long-Term Care insurance."
Long-Term Care is rarely covered by health insurance plans, and disability insurance is to replace your salary. It doesn't provided additional benefits for Long-Term Care services.

"Medicare and Medicaid will cover my bills."
Medicare is generally available for those who are disabled and for people over age 65, but it only pays limited amounts for Long-Term Care services and only if you meet Medicare's conditions for payment.

Medicaid is the government program to help those in financial need. It won't kick in until virtually all of your assets have been consumed.

"I can save enough on my own."
See the chart below to see how much self-insuring could cost you.

* Assuming five percent inflation.
** For an average three-year stay in a nursing home at age 80.
*** Assuming six percent returns.

"LTC insurance is nursing home insurance. I don’t think I’ll ever go there."
No one ever wants to go to a nursing home, but at some point in your life it could become necessary. Don’t confuse nursing home care with the need for Long-Term Care assistance. Most Long-Term Care is provided in settings other than a nursing home. Today’s best LTC policies cover all key caregiving needs and settings.

"Long-Term Care insurance is too expensive."
Long-Term Care insurance is often more affordable than people think. Premiums are based on your age at the time you apply for coverage, so the younger you are when you get the protection, the more affordable it can be. Further, just one year in a nursing home is often more expensive than 20 or 30 years of Long-Term Care insurance premiums.