LTC Myth vs Reality
LTC Myth vs. Reality:
Debunking Common Misconceptions
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Myth
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Reality (The Financial Planning Fact)
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Implication for the Client
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1: Medicare Will Pay for Long-Term Care
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False. Medicare primarily covers short-term, skilled medical care (like rehab after a hospital stay). It does not cover extended custodial care or assistance with daily activities (ADLs) at home or in an assisted living facility.
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Relying on Medicare means being unprepared for the $60,000 to $108,000+ annual cost of extended, non-medical care.
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2: Long-Term Care Only Happens to the Very Old or Ill
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False. 37% of people currently receiving LTC are under the age of 65*. A serious accident, disabling illness, or early cognitive decline can trigger the need for care long before retirement.
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Waiting until retirement risks being uninsurable due to health changes. The best time to secure coverage is typically in your 50s.
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3: I Have Enough Savings (I'll Self-Insure)
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Potentially Catastrophic. Self-insuring means accepting that $100,000 to $1,000,000+ of your planned retirement portfolio could be diverted to care expenses, destroying your income strategy and legacy plan.
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You risk spending down the very assets meant to fund your desired lifestyle, leaving your surviving spouse financially vulnerable.
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4: I Don't Need Insurance Because My Family Will Care for Me
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A Recipe for Ruin. Relying on family places a massive emotional, physical, and financial burden on them, often forcing them to quit jobs or sacrifice their own retirement savings.
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LTC planning is an act of love. Insurance provides the choice and funding for professional care, preserving family relationships and your loved ones' careers.
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5: LTC Insurance is Too Expensive and You Lose Your Money If You Don't Use It
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Our clients spend $100-$300/m per person for LTC insurance. Hybrid Life/LTC policies solve the "use-it-or-lose-it" problem. If you never need care, the policy transfers to a tax-free death benefit for your heirs.
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LTC insurance, when properly designed, can be affordable for people. And hybrid products turn the expense into a versatile asset for either care or inheritance.
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6: I Can Wait to Buy Insurance Until I'm Older
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Wrong. Long-Term Care insurance premiums are based on age and current health. Waiting will result in significantly higher costs and increases the likelihood that a health issue will make you uninsurable.
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Waiting is the most expensive mistake in LTC planning. Premiums are locked in based on your age and health at the time of purchase.
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