Do You Need Long-Term Care Insurance? | SunTrust Resource Center

Insurance

Do You Need Long-Term Care Insurance?

Do You Need Long-Term Care Insurance?
 

Almost 70 percent of people age 65 or over will need some sort of long-term care, according to the National Clearinghouse for Long Term Care Information.1 That means planning for medical expenses as one ages has become an increasingly significant part of retirement planning. One potential solution: long-term care insurance.

Long-term care insurance can help pay for nonmedical needs—such as assistance with bathing, dressing or eating—that health insurance and Medicare generally don’t cover.

When a family member is first diagnosed with a serious or degenerative illness, relatives often step in to help. But caregiving can become increasingly stressful, and stretch over years.

“We often intend to find a facility for someone to live in or to bring in caregivers, but all of that must be paid for out of pocket,” says Deb Newman, past chair of the board of directors of the Life and Health Insurance Foundation for Education. The nonprofit educates consumers about insurance planning. “If you don’t have a plan for long-term care, the family becomes the plan.”

Here’s what you need to know about long-term care insurance:

Who should consider it: Newman says the best time to start thinking about long-term care insurance is when you’re in your mid-40s through your 60s. Buying a policy while you’re relatively young allows you to start at a lower premium and expand the coverage as needed.

“Some policies have future purchase options, which allow you to start with a base plan while you’re younger,” says Newman. “Then you can review it every five years or so and determine if you might want to add benefits such as inflation protection or more coverage.”

Because your premiums are determined by your health at the time you buy the policy, it’s wise to make the purchase while you’re healthy. If you wait until you need the coverage, you may not qualify for it, or have to pay very high rates.

How long-term care insurance works: If you became unable to care for yourself, your long-term care policy would start paying a portion of your care after an elimination period of 30, 60 or 90 days. Premiums will depend on the proportion of care you elect your policy to pays for as well as the elimination period. You’ll want to research long-term care costs in your area before you buy.

Some other factors to consider:

  • Maximums: Many policies have a ceiling on how much they will pay per day, as well as a lifetime maximum.
  • Type of care: Not all policies cover home care. If you prefer this option, make sure you buy a policy that covers it.
  • Rising costs: Some plans offer inflation protection; others will automatically increase your coverage without you having to be underwritten again.
  • Family history: “Look at how long people in your family have lived to help determine how much coverage you need,” says Newman.

Financial benefits: Twenty-nine states and the District of Columbia offer state tax incentives to residents who purchase long-term care policies. And more than 40 states participate in the partnership program, which allows people who’ve purchased long-term care insurance to qualify for Medicaid while preserving some of their assets rather than spending them down.2

But perhaps the best reason to purchase long-term care insurance is the peace of mind you’ll get from knowing that your health care costs—and your care—won’t be a burden on your family.

1  http://www.longtermcare.gov/LTC/Main_Site/index.aspx

2 http://www.longtermcare.gov/LTC/Main_Site/Paying/Private_Financing/LTC_Insurance/State_Partnership.aspx

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

Related

Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at www.suntrust.com/investmentinfo.

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.