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In most age groups, the likelihood of disability - being incapacitated due to illness or accident - is greater than the likelihood of death. For younger people, disability insurance is used to protect their greatest asset: the ability to earn an income.
For a retiree, Long Term Care Insurance is the equivalent to disability insurance for someone who is still working. The cost of a stay in a nursing home is very expensive, and an extended stay can put your financial assets in jeopardy. That is, you may need to deplete your capital to pay for a stay in a nursing home, or have extended home health care services. Consider the following facts:
According to the U.S. Department of Health and Human Services, 43% of those turning age 65 (more than 50% of women, and nearly 33% of men) will require long term care in a nursing home during their life. Seventy percent of all couples can expect at least one partner to use a nursing home after age 65. The average cost of a one-year nursing home stay is more than $60,000.
Medicare covers only about 3.6% of all long term care costs, because it provides limited coverage for skilled nursing care only. Unfortunately, more than 90% of individuals currently in nursing facilities are receiving custodial care, for which Medicare pays nothing.
Over 70 percent of single individuals and 50 percent of couples with one partner in a nursing home are impoverished within a year.
Forty percent of people over age 65 risk entering a long term care facility, half of whom will stay six months or less, and the other half of whom will stay an average of 2.5 years.
Clearly, the risk of a long term confinement in a nursing facility is one of the greatest hazards faced by today’s retiree. These facts explain the growing popularity of long term care and home health care insurance policies. |
