Funding LTCOnly one in four (24 percent) of respondents say they currently own LTC insurance, however industry figures show that only about 11 percent of people over 55 actually do. Nearly a quarter (23 percent) of respondents are not planning at all for LTC expenses and others say they plan to cover the costs with their 401(k) or retirement savings (22 percent) or their personal savings (21 percent). Alarmingly, more than three in five of those surveyed (64 percent) say they do not believe that state laws can force children to pay their parents’ unpaid nursing home bills. However, 29 states currently have laws that could make a patient’s children responsible for unpaid LTC bills. “It is important to start discussing LTC planning as a family and develop a well thought out plan so that parents and children understand where LTC funding will come from and both parties feel secure in the approach,” Carter said. “Proper retirement planning should include some type of LTC insurance protection that can provide funds for someone should they have LTC expenses.” The most commonly known long-term planning choice is the traditional stand-alone LTC policy. While it is very customizable, some people don’t like the “use it or lose it” nature of these products. There are also some innovative products available – including a LTC rider that can be added to life insurance coverage when purchased. “With a life insurance/LTC rider combo, the death benefit is available to be accelerated, while living, for LTC expenses,” Carter said. “However, in the event no long-term care is needed, the insured has a death benefit to leave to heirs.” Estimating the Cost of LTC Advisors say only 15 percent of their clients have a good understanding of the potential costs of LTC. People living to age 65 have a 70 percent chance of needing some type of LTC in their lifetime. 1 The average cost per year for a nursing home is projected to be $265,000 by 2030 – and that is not even for a private room. 2 Nationwide Financial launched the Personalized Health Care Assessment program to help advisors estimate their clients’ health care expenses in retirement. The program uses proprietary health risk analysis and up-to-date actuarial cost data such as personal health and lifestyle information, health care costs, actuarial data and medical coverage to provide a meaningful, personalized cost estimate that will help clients plan for medical expenses.
“Instead of guessing, advisors can use this tool to provide a fact-based cost estimate based on their clients’ health risk and lifestyle and build a plan from there,” said Kevin McGarry, director of Nationwide Financial’s retirement income strategies.Advisors can visit www.nationwidefinancial.com/healthcare to learn more. Methodology: The Long-Term Care (LTC) Study was conducted online between Sept. 17 and Sept. 24, 2012. The respondents comprised 813 adults ages 50+ having $150,000 or more in annual household income/investable assets. About Nationwide Nationwide Mutual Insurance Company, based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor’s. The company provides customers a full range of insurance and financial services, including auto insurance, motorcycle, boat, homeowners, pet, life insurance, farm, commercial insurance, annuities, mortgages, mutual funds, pensions, long-term savings plans and specialty health services. For more information, visit www.nationwide.com. Life insurance is issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio. Nationwide, Nationwide Financial, the Nationwide framemark, Nationwide YourLife and On Your Side are service marks of Nationwide Mutual Insurance Company. 1 LTCI’s Revolutionary Evolution, Nov. 1, 2011, Life Insurance Selling 2 Life and Health Advisor, “Don’t Let Your Clients Get Blindsided By Unexpected LTC Costs,” 2010