A day may come when you won’t be able to manage on your own and this is where Long-Term Care (LTC) would come into play. LTC insurance provides a safety net for when you are no longer able to care for yourself.
Long-term care insurance puts you in control. It goes far beyond covering costs in a nursing facility as many people assume. Its coverage can begin at any point that a person is unable to manage activities of daily living on their own. These include, but are not limited to, eating, bathing, getting dressed, moving from one location to another, bathroom hygiene, and continence. Depending on your age presently, the mentioned actions may seem a bit farfetched to you right now. LTC coverage kicks in when the basic functions of a person are not being met.
How likely is it that you will need long-term care? The odds are greater than you think! Getting older, family history of diseases, and gender, as women tend to live longer than men, thereby requiring LTC, and whether your lifestyle is more or less healthy are among the contributing factors of needing care. I think we can all agree with the COVID-19 pandemic more people are opting to have in-home aides rather than sending their loved ones to nursing homes. Below is a chart to estimate the amount you might pay for a long-term care policy in New Jersey in 20 years with 3% inflation, according to Mutual of Omaha.
| Home Health Care | Average Costs in 2019 | Projected Costs in 2040 |
| Home Health Aide | $25.58 per hour | $47.59 per hour |
| Licensed Practical Nurse (LPN) | $75.32 per hour | $140.12 per hour |
| Registered Nurse | $98.94 per hour | $184.06 per hour |
| Assisted Living Facility | Average Costs in 2019 | Projected Costs in 2040 |
| One Bedroom Unit | $82,660.32 per year | $153,772.54 per year |
| Nursing Home | Average Costs in 2019 | Projected Costs in 2040 |
| Semi-Private Room | $125,200.80 per year | $232,910.37 per year |
| Private Room | $139,186.80 per year | $258,928.45 per year |
When Should You Buy?
There’s a huge misconception that you should wait until you’re approaching retirement to purchase a policy. Waiting too long to buy a policy can cost a lot more, because rates are based on age and health. It’s best to start shopping for a policy when you’re young and healthy. You can certainly buy a policy when you’re older, but expect to pay much more. Plus, if you wait too long and develop a condition that may require Long-Term Care, you could become uninsurable, so keep that in mind.
Some very good news: Married individuals incur lower premiums than singles. Insurance companies are confident that the love and support of your dear spouse will reduce your need for long term care. They’re right, of course! Moreover, benefits can be enjoyed if you live anywhere in the US; this won’t spoil your dream of moving to Florida. If you’re thinking of moving to Israel or another country, many LTC plans can accommodate that too.
Long-Term Care Options
The following are the primary LTC insurance options available to you today:
Traditional LTC – Traditional LTC insurance works similar to health insurance. This kind of coverage is intended to ensure your assets aren’t affected by the cost of receiving long term care requires, this also includes home-based care.
Hybrid Life Insurance LTC – This is an increasingly popular option that combines the traditional death benefit of life insurance with LTC benefits. This insurance is intended to ensure your assets aren’t affected by the cost receiving long term care requires, including home-based care, while maintaining maximum flexibility.
Self-Insurance/Moneyguard- This option is typically the best choice for people with major health issues – health doesn’t affect account value – and/or for those with large pools of money earning little to no interest. You put aside a certain amount of liquid funds, say $100,000. The money accrues compounding interest year after year, and will roughly triple in value after about fifteen years. The money in this account can be withdrawn tax free for LTC expenses, based on the account’s value at the time. Whatever money is not withdrawn for LTC remains there as a death benefit to your children.
Life Insurance LTC Rider- This type of coverage is suitable for maximizing the death benefit while retaining the flexibility to address LTC’s costs.
There is always an option for you.
The options mentioned above are the most common, but not by any means, the only ones. If you believe that any of these options are not for you, don’t worry! We offer comprehensive plans from a wide variety of insurance companies, and we’ll be glad to help you find the best options for you.
At Cosmo, our LTC specialists work with you one-on-one to guide you through all coverage options. Our LTC will provide coverage for home aides and therapy nursing home care, or assisted living. Regardless of your age or health status, we can get you approved for a favorable LTC plan from one or more reputable carriers.
Give us a call today! You and your family will be very thankful you did.
Mark Herschlag is the founder and CEO of Cosmo Insurance Agency, which is based in Ocean and Bergan County. Cosmo Insurance Agency offers personalized solutions for individuals and businesses looking to obtain health, life, dental, long term care, vision or disability insurance.
Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.
