Is LTCI Worth the Risk?

The first thing that Stu thought of when he heard the news of his Mom falling down the stairs was, strangely enough, not of his old lady’s health (after all, Mom has been through worst). Of course, he was worried about her, but what was more threatening was of him juggling tasks. There’s now a higher chance of losing sleep and work from looking after her. Will he be able to manage to do everything? Couple that thought with him working double shifts and trying to squeeze in time for his kids – Stu’s caught between a rock and a hard place.

It’s not that he didn’t mind looking after her. After all, he wanted to give back to his mother for everything she’s sacrificed for him and his own family. Still, everything seems so surreal, like he never had any choice but just to keep up and man up with whatever life decided to throw at him.

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Stu did want to plan for his Mother’s future. He did encounter decisions that probably would have helped him with what he’s currently facing. Stu met with several insurance agents to help him understand the basics of long term care insurance (LTCI). He even visited some nursing homes, just to see if his mother will fit right in. Still, Stu decided to just wing it – like he always did – and ended up with not pushing through with his plans. Probably because of the fear of not making ends meet or the thought that he’ll be paying for coverage that wouldn’t really matter in the future (what are the chances of his Mother needing long term care, anyway?), Stu decided that the risk of purchasing a plan was too high.

Looking back now, Stu wasn’t sure if he made the right decisions. If there’s one thing that does bother Stu, and it is that time doesn’t wait for anyone. Stu can’t even prepare for his own retirement. What’s even sadder is that his children may follow the same path he had with his mother. He could have both given the time and attention his kids and Mother deserved, if only he secured coverage then.

People like Stu face a common problem that most have when it comes to retirement planning. Many brush aside the importance of coverage until they are actually experiencing the need for it. Getting bogged down because of the fear of not making enough money or having a delusional sense of confidence that everything will eventually work out has its repercussions.

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And these repercussions do not only affect you. It may ultimately end up on you being a burden to your children to bear. It’s a vicious cycle of regret – I should have done this and that.

Which is why planning for retirement needs your full attention. After all, this is for your (and consequently, your family as well) benefit. As stated by the U.S. Department of Health and Human Services, 70% of individuals at the age of 65 years and above are expected to need some form of assistance for their long term care needs. Additionally, advancements in medical technology have also played a part in prolonging life spans. Longevity may mean additional years of expected care, which then equates to more and higher spending.

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The Importance of Long Term Care Insurance

LTCI policies address the need of one to perform their Activities of Daily Living (ADLs). These ADLs (such as bathing, transferring, personal hygiene, etc.) can often be overlooked as simple tasks that do not need that much assistance. But consider the underlying effects of not being able to do these tasks, and the expenses need for caregivers to assist you. Chances are it’ll end up as a costly endeavor.

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The expensive cost of assistance during the retirement years is further illustrated in Genworth’s 2016 Cost of Care Survey. The study revealed (for annual periods) that semi-private rooms in nursing homes in the country cost $82,125, while home health aide services amount to $46,332. The staggering costs prove that more people definitely need to prioritize long term care. Out-of-pocket spending may just not be possible with the cited amounts (given that retirement savings for most seniors may just amount to $172,000).

Case in point, coverage that can address long term care can help policyholders have the opportunity to make the most out of their retirement years. And by planning, checking one’s options, and purchasing a plan that will best suit your needs will help prepare you in case something dire happens in the future. Perhaps instead of having the fear of what may happen today, instilling the thought of preventing future fears from happening may help us see that LTCI isn’t that much of a risk at all. In fact, it may be the best tool that you’ll need to face an uncertain tomorrow.

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It’s that sense of control that you gain from a plan that makes LTCI a reasonable purchase. And with that control, people like Stu may have an opportunity that most take for granted: a power to choose how you should live your life.

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