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Time to Consider Long-Term Care

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According to Census Bureau, 73 million baby boomers will be 65 and older by 2030. Therefore, the demand for long-term care services is expected to grow rapidly in the coming years. It’s advisable to plan for long-term care needs.

Without a plan, the cost of long-term care can be very expensive and quickly add up. Depending on the state and facility, out-of-pocket costs could be upwards of $200 per day for skilled nursing care. Another alarming stat is that there is a 70% chance that someone turning 65 will need some long-term care services.

It’s important to understand what long-term care provides as well as who may need long-term care.

What Will Long-Term Care Do?

Most people don’t think about long-term care until they or a loved one needs it. Long-term care is a type of care that includes:

  • Personal and medical care services for people with chronic illnesses or disabilities.
  • Designed to meet a person’s health or personal care needs during a short or long period of time
  • Available at your home, in the community, or in institutional settings such as nursing homes or assisted living facilities.
  • Services that help people live as independently and safely as possible when they can no longer perform everyday activities on their own.

Who Needs Long-Term Care?

A safe assumption by many is that long-term care is something to worry about later in life. As people age, their physical and mental capabilities decline. Many different people may require long-term care such as those who:

  • Have an ongoing or degenerative health condition
  • Suffer a disability from a medical emergency (i.e., heart attack, stroke, accident, etc.)
  • Require permanent care during later stages of dementia

Long-Term Care Insurance (LTCI) Policy

As the name suggests, LTCI is insurance that helps cover the cost of long-term care services. Enrolling in an LTCI policy when you are younger and healthy is important to keep premiums down. Doing so can also keep your benefits as high as possible.

Most LTCI policies have a waiting period before benefits kick in. This is usually around 90 days. After the waiting period, the policy will cover a certain amount per day for a set number of years. Some LTCI policies also have an inflation rider. This helps to keep up with the rising cost of long-term care services. The younger you are and if you’re relatively healthy when you buy an LTCI policy, the less you will pay in premiums.

long term care planning facts

“It Won’t Happen to Me”

You can live in the hope that you are in the 30% chance of not needing long-term care services. But this is not a good enough reason to forego a long-term care plan. Without a plan, you will have to pay for long-term care services out of pocket. These costs can quickly add up and be very expensive.

For example, the average cost of a private room in a nursing home is around $100,000 per year. The cumulative expenses can quickly change your savings and leave you financially struggling in retirement. Additionally, Medicare does not cover most long-term care services.

Planning for long-term care needs is important to ensure that you are prepared for the future. Check out this Cost of Care Survey for more information about the importance of Long-Term Care and their costs. As always, I’m always available to answer of your questions.

insurance coverage

Closing Gaps in Your Insurance Coverage

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insurance coverage

Buying insurance is about sharing or shifting risk, but you may think you’re covered for specific losses when, in fact, you’re not. Here are some common coverage gaps to consider when reviewing your own insurance coverage.Life Insurance

In general, you want to have enough life insurance coverage (when coupled with savings and income) to allow your family to continue living the lifestyle to which they’re accustomed. But changing circumstances may leave a gap in your life insurance coverage.

For example, if you have life insurance through your employer, a job change could affect your coverage. Your new employer may not offer the same amount of insurance, or the policy provisions may differ. Review your income, savings, and expenses annually to help ensure that the amount of life insurance you have matches your needs.

Homeowners Insurance

It may not be clear from reading your homeowners policy which perils are covered and how much damage will be paid for. It’s important to know what your homeowners policy covers and, more important, what it doesn’t cover.
You might think your insurer would pay the full cost to replace your home if it were destroyed by a covered occurrence. But many policies place a cap on replacement cost up to the face amount stated on the policy. You may want to check with a building contractor to get an idea of the replacement cost for your home, then compare it to your policy to be sure you have enough coverage.

Even if your policy states that “all perils” are covered, most policies carve out many exceptions or exclusions to this general provision. For example, damage caused by floods, earthquakes, and hurricanes may be covered only by special addendums to your policy, or in some cases by separate insurance policies altogether. Also, your insurer may not cover the extra cost of rebuilding attributable to more stringent building codes, or your policy may limit how much and how long it will pay for temporary housing while repairs are made.

To help avoid these gaps in coverage, review your policy annually with your insurer. Also pay attention to notices you may receive. What may look like boilerplate language could actually be significant changes to your coverage. Don’t rely on your interpretations — ask for an explanation from your insurer or agent.

Auto Insurance

Which drivers and what vehicles are covered by your auto insurance? Most policies provide coverage for you and family members residing with you, but it’s not always clear-cut. For instance, a child who is living in a college dorm is probably covered, but a child who lives in an off-campus apartment might be excluded from coverage. If you and your spouse divorce, which policy insures your children, particularly if they are living with each parent at different times of the year? Notify your insurer about any change in living arrangements to avoid a gap in coverage.

Other gaps include no coverage for damaged batteries, tires, and shocks. And you might not be covered for stolen or damaged mobile phones or other electronic devices. Your policy may also limit the amount paid for a rental while your vehicle is being repaired.


In fact, insurance coverage for rental cars may also pose a problem. For instance, your own collision coverage may apply to the rental car you’re driving, but it may not pay for all the damage alleged by a rental company, such as loss of use charges. If you’re leasing a car long term, your policy may cover the replacement cost only if the car is a total loss or is stolen. But that amount may not be enough to pay for the outstanding balance of your lease. Gap insurance can cover any difference between what your insurer pays and the balance of your lease.


Policy terms and conditions aren’t always easily understood, and you may not be sure what’s covered until it’s time to file a claim. So review your insurance policy to help ensure you’ve filled all the gaps in your coverage.

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