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Long Term Care
The single largest financial risk affecting retirees: Long-Term Care.
Are You Protected Against The Greatest Risk In Retirement?
Here are your chances after reaching age 65
(Based on remaining life expectancy)
LIFETIME POSSIBILITY FROM AGE 65 ON
EVENTS THAT DO OCCUR: FOR MEN FOR WOMEN
MAJOR HOUSE FIRE 2.2% 2.6%
SEVERE CAR ACCIDENT 15.5% 18.0%
BECOMING ADL DISABLED 44.0% 72.0%
OR COGNITIVELY IMPAIRED
Did you know?
The likelihood of a 65-year-old having to enter a nursing home is much greater than his/her having an auto accident or having his/her house destroyed by a covered homeowners peril.
The likelihood of a couple experiencing a long-term stay in a nursing home is 840 times more likely than their experiencing a total loss on their house and over 80 times more likely than their experiencing an automobile claim. Most insure against these common catastrophe exposures, yet, most are not insuring against a risk that will most certainly happen to seven out of 10 couples.
In order to adequately plan for the risk of long-term care, you have to know how much to plan for. A common trap fallen into by planners is the average length of stay and current cost strategy.
The cost to be planned for should be in terms of today’s costs inflated to the most likely date for admission. Most 65-years-old are likely to be admitted to a nursing facility 15 to 20 years down the road. The average annual inflation rate over the last twenty years for nursing home care in this country has been 6.3%. Twenty years down the road, the annual cost could be much higher (assuming that these historical trends continue).