Why November Is Long-Term Care Insurance Awareness Month

November is a month marked by reflection and giving thanks, but it’s also Long-Term Care Insurance Awareness Month. As we approach the holiday season, it’s an ideal time to reflect on the future—especially the future of our health and how we will care for ourselves as we age. Long-term care (LTC) is a topic that many people avoid thinking about, but it’s an essential part of any comprehensive financial plan.

Whether you're already planning for your retirement or just starting to think about the future, Long-Term Care Insurance Awareness Month is the perfect opportunity to educate yourself about this crucial aspect of long-term planning. Let’s dive into why November is dedicated to this important cause and explore the need for long-term care insurance, the risks of not having it, and the role it plays in your financial security.

What is Long-Term Care?

Before we dive deeper into Long-Term Care Insurance (LTCI), it’s important to understand what long-term care actually entails. Long-term care refers to a wide variety of services and supports that people need over an extended period due to chronic illness, disability, or other conditions that prevent them from living independently.

This care is usually needed by individuals who have difficulty performing activities of daily living (ADLs) such as bathing, dressing, eating, and using the bathroom. It may also include services like nursing home care, assisted living, adult day care, and home health care. While long-term care is often associated with aging, it can affect people of all ages who have physical or cognitive impairments.

The Importance of Long-Term Care Insurance

According to the U.S. Department of Health and Human Services, nearly 70% of people over the age of 65 will require some form of long-term care in their lifetime. With such a significant portion of the population potentially facing the need for LTC, it’s critical to plan for this inevitability.

Long-Term Care Insurance (LTCI) provides coverage for these types of services and can be an essential part of a solid retirement plan. It is designed to help cover the costs of care that aren’t typically covered by regular health insurance, Medicare, or Medicaid. This includes in-home care, assisted living facilities, and nursing homes. With long-term care being so expensive, having LTCI can help prevent financial strain on individuals and families during times of crisis.

However, despite its importance, many people do not have adequate coverage or fail to plan for long-term care at all. This is where Long-Term Care Insurance Awareness Month comes in.

The Rise in Long-Term Care Costs

The cost of long-term care has been rising steadily in recent years. For example, the Genworth 2023 Cost of Care Survey found that the average annual cost of a private room in a nursing home is over $100,000, and the average annual cost of home health care is close to $60,000. These figures can vary based on location and the level of care needed, but it’s clear that long-term care is expensive.

Without insurance, many people are forced to rely on their savings, or worse, their family members to help pay for the cost of care. If the financial burden is too great, individuals may have to move to a less expensive facility or even rely on government assistance programs like Medicaid, which can come with limitations and strict eligibility requirements.

LTCI helps to fill this gap by providing funds to cover the cost of care, reducing the risk of draining personal savings or relying on family for support.

Understanding the Risks of Not Having Long-Term Care Insurance

Many individuals mistakenly believe that Medicare will cover the cost of long-term care, but this is not the case. Medicare provides limited coverage for short-term skilled nursing care in certain circumstances, but it does not cover long-term custodial care. Similarly, Medicaid may help with the costs of care for individuals who meet strict income and asset criteria, but eligibility for Medicaid can be difficult to achieve and doesn’t guarantee that the type of care desired will be covered.

The absence of long-term care insurance could leave individuals and families vulnerable to high out-of-pocket costs. If someone requires long-term care and doesn’t have the necessary resources to cover it, they may have to deplete their savings or sell assets, such as their home, to pay for the costs.

In addition, the lack of LTCI can place a burden on family members, who may have to step in to provide care. This can be emotionally and physically draining, and it can also lead to financial strain as family members may need to reduce their working hours or quit their jobs entirely to provide care. With the rise in caregiving responsibilities, many people find themselves caught between their careers, their children, and the need to care for aging relatives.

Why November?

November is Long-Term Care Insurance Awareness Month because this time of year gives us an opportunity to think ahead and plan for the future. As we approach the holiday season, we may begin to reflect on family and the legacy we want to leave behind. It’s the perfect time to focus on the well-being of those we love, particularly when it comes to planning for their long-term health care needs.

The month also aligns with the seasonal rhythm of retirement planning. People are often reviewing their financial plans in anticipation of the new year, so it serves as a reminder to include long-term care coverage in their strategy. Additionally, many insurance companies use November to offer discounts or special promotions, making it a great time to purchase LTCI or review your existing policy.

The Benefits of Long-Term Care Insurance

Peace of Mind: One of the primary benefits of LTCI is the peace of mind it provides. With proper coverage, individuals don’t have to worry about the burden of long-term care costs if they become ill or disabled. This can allow them to focus on recovery rather than finances.

Asset Protection: Long-term care insurance helps protect your assets from being drained by expensive health care costs. It allows you to maintain your financial security and preserve your wealth for your family, rather than spending it all on care.

Choice of Care: LTCI allows policyholders to choose the type of care they want, whether it’s care in a nursing home, assisted living facility, or home care. This level of flexibility allows for a more tailored approach to care and helps ensure that individuals can maintain their dignity and comfort as they age.

Relieving Family Stress: When individuals need long-term care, it’s often family members who step in to provide assistance. This can create stress and even lead to burnout for caregivers. Having long-term care insurance can help reduce this burden and prevent family members from having to provide hands-on care.

Tax Benefits: In some cases, premiums paid for long-term care insurance can be deducted from taxes. This tax benefit can provide additional savings for individuals looking to plan for the future.

How to Get Started with Long-Term Care Insurance

If you’re considering adding LTCI to your financial plan, the first step is to evaluate your needs. There is no one-size-fits-all solution, so it’s essential to consider your health, family history, and potential care needs as you weigh your options.

Next, consult with a financial advisor or insurance professional who specializes in long-term care. They can help you understand the types of policies available and guide you in selecting the one that best fits your needs and budget. Many people choose to purchase LTCI in their 50s or early 60s, while they are still healthy and premiums are more affordable.

Finally, review your policy regularly to ensure that it continues to meet your needs. As your life circumstances change, so too may your long-term care requirements.