FINANCIAL CORNER

FREQUENTLY ASKED QUESTIONS ABOUT LONG TERM CARE

1) What is long-term care?

There are three levels of long-term care (skilled nursing care, intermediate care and custodial care) which can be provided in nursing homes, assisted living facilities, adult day care centers, or at home.

2) Why is it important to plan for long-term care?

The odds of needing long-term care for those who are over 65 are pretty high,
and the average national cost of a one-year nursing home stay exceeds $62,000 (Source: National Clearinghouse for Long Term Care Information, 2006). It is much higher in some states. With inflation, in 15 or 20 years, a one-year nursing home stay can easily cost more than $100,000.

3) Does Medicare pay for long-term care?

Medicare only provides limited coverage for skilled nursing care or physical therapy, but does not cover custodial care which is often needed the most by older individuals.

4) Should I pay for the care myself?

If you have plenty of savings, investment and/or other assets, paying for the care out of your own pocket is certainly an option, but be prepared for the possibility of an extended care period.

A reverse mortgage is also one of the source from which you may draw funds from to hire caregivers.

5) How much does it cost to buy a long-term care insurance?

The cost of a long-term care insurance policy depends on your age & health condition, benefit amount/benefit period chosen, deductible, type of facilities included and inflation protection choice.

By Lily M. Hazelton, CLU, ChFC, CFPR of Brecek & Young Advisors, Inc.

The information contained herein is not intended as a substitute for direct financial or legal advice. Brecek & Young Advisors, Inc. does not provide tax advice. Please contact a tax or financial professional for further information.