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What is Long-term Care Insurance?

Extended care insurance is designed to help pay for the astronomical cost of nursing homes or home healthcare. There are many different types of extended care insurance policies (outlined below). All of them have one thing in common: they help with the cost of receiving care. As we age, the likelihood of experiencing a health condition that leaves us in need of care increases. You will be surprised at how high the cost of care is.


What does “In Need of Care” Mean?

“In need of care” can have different meanings with different insurance companies, but the definition revolves around the need for assistance with everyday activities. As we age, many of us will develop medical conditions that can lead to difficulty with the everyday things that were easy when we were young. “Couldn’t happen to me,” right? Wrong. Actually, most of us will need care at some point in our lives. In some cases, that care might be needed for years and years. It doesn’t matter if we are talking about the elderly man who suffered a stroke or the little old lady who is sharp as a tack but confined to a wheelchair. Both are examples of people who require care. In the twilight of our years almost every single one of us will need hospice care.


How Much Does Care Cost?

Care is very expensive. The average cost for an in-home attendant is about  $44,000 per year. Nursing care in a facility with a private room is even more expensive at about $84,000 per year. Curious how much the cost of care is in your area? Care Calculator>>


How Does Extended Care Insurance Help?

Extended care insurance pays for the cost of your care so your family doesn’t have to. It’s important to make calculated financial decisions in your older years. This involves taking a realistic look at the possibility that someday you will need help with everyday activities and the service you will need will likely be very expensive. One option is to set aside a large sum of money in a safe place in case you need care. There are actually annuities designed specifically for extended care. Another option is to purchase long-term care insurance. Long-term care insurance can offer exactly the financial safety net you need in your later years.


How Much Does Extended Care Insurance Cost?


The cost of insurance varies based on age and health history. Here is an example we pulled from an accredited Wall Street Journal article:

 A 55-year-old single adult can expect to pay $2,065 a year for $162,000 in benefits with 3% compound inflation protection, which would increase to about $330,000 in coverage at age 80, according to the American Association for Long-Term Care Insurance, a trade group.

The Standard, MetLife, Principal Financial Group, Genworth, & Lincoln Financial Group