The Financial Impact of Long Term Care

http://www.dreamstime.com/royalty-free-stock-photo-old-men-talking-image5358445If and when a family member needs long-term care, it can put a severe emotional and financial burden on the entire family, particularly women who make up 2/3 of the caregivers in our country.1

When a spouse or a parent needs extended care, women in particular can lose the lifestyle and the career they’ve worked so hard to achieve. Caregiving responsibilities will crush the dreams of millions of women in the next 10-20 years unless families plan ahead with long-term care insurance.

A significant number of younger people need long-term care due to strokes, accidents or debilitating conditions like brain tumors, Lou Gehrig’s disease, MS, and even early Parkinson’s or Alzheimer’s disease.2 If an event hasn’t occurred at a younger age, the experts tell us that there is a 61% chance that a 65 year old will need long-term care at some point in his or her life.3 The good news is that most people don’t need nursing home care as less than a third of long-term care is provided in nursing homes.4 However, home care can cost as much or more depending on how much is needed.5

While you may be used to thinking about long-term care insurance purely as a financial protection product, consider this: a major consumer study conducted in 2010 said that Americans consider not being a burden to their families twice as important as protecting their assets. It also said they worry about being a burden to their children five times as much as death.6 We believe that first and foremost, long-term care is a family issue. Without long-term care insurance, relationships can suffer irreparable harm:

• marriages are strained to the breaking point when care for a parent or in-law becomes too much or too long;

• sibling relationships are damaged because the caregiving burden for a parent is not distributed equally and often falls mostly on one;

• adult children wind up doing personal tasks for a parent such as bathing and dressing, a situation that makes both parties uncomfortable; and

• parents who thought the child-raising years were over find themselves faced with caring for a single adult child with a head injury or paralysis from a motor vehicle or sporting accident.

By injecting a meaningful long-term care insurance policy into any of the above situations, the stress level is significantly diffused and relationships are preserved as family members retain their respective roles instead of becoming a primary caregiver. The son stays the son. The daughter stays the daughter. The healthy spouse gets enough rest which works wonders to avoid depression and stimulate a positive outlook.

Another frequently overlooked benefit of long-term care insurance is that not only does it give the gift of money to hire caregivers; it also gives the gift of time. Today’s policies pay for care coordinators…registered nurses who help families find caregivers and manage the care. This task can be extremely time-consuming, and who among us has a lot of time to spare these days?

Since half of the 230 million Americans over age 18 are now over 50 years old (113 million), the United States is on the cusp of a caregiving tsunami. 7 Our next article will examine the financial impact of long-term care.

1“Caregiving in the U.S. 2009”, National Alliance for Caregiving/AARP, November 2009, p. 42; 2Kaye, H. Stephen, Charlene Harrington, and Mitchell P. LaPlante. “Long-Term Care: Who Gets It, Who Provides It, Who Pays, and How Much?” Health Affairs, January 2010 29:1, p. 13; Kemper et al. “Long-term Care Over an Uncertain Future: What Can Current Retirees Expect?” Inquiry 42: Winter 2005/2006, p. 342; 4Stephen, Charlene Harrington, and Mitchell P. LaPlante. “Long-Term Care: Who Gets It, Who Provides It, Who Pays, and How Much?” Health Affairs, January 2010 29:1, p. 13; 5 Multiple Long-Term Care Insurance Carrier Surveys, 2009; 6America Talks: Protecting Our Families’ Financial Futures”, a national survey conducted by Age Wave/Harris Interactive, sponsored by Genworth Financial, March 2010; 7 Census Bureau

 

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