The costs of long-term care are increasing every year, but most families do not understand what they will be confronting when it is their time to start paying for care. Too many people wait until they are in the midst of a crisis situation before they start trying to figure out how the world of long-term care works. Agents and advisors confront this reality every day.
People want to remain financially independent and in control of their care decisions for as long as possible. People do not want to go onto Medicaid, yet consumers lack awareness and are unprepared for how they are going to cover the costs of Home Care, Assisted Living, Skilled Nursing Care, or Hospice. It is a subject typically ignored until a loved one is in immediate need of care.
Agents and advisors are dedicated to helping clients by finding solutions to their needs and problems. The best way to help families is to provide as much information and access to options as possible. Clients assume advisors are aware of all options in the market that can help them, and expect to be informed so they can make decisions about how to plan and fund their long-term care.
One solution analyzed is the growing use of life insurance policies as a tool to fund long-term care. Did you know that a life insurance policy can be sold and the funds used tax-free to pay for assisted living, home care and all other forms of long-term care? Instead of allowing a policy to lapse or be surrendered, the owner has the legal right to convert the policy into a long-term care benefit plan. The only problem is — despite that fact that millions of people own life insurance, too few people understand their rights as the owner. Life insurance policies are assets. Think of them just like a house. The owner of a house wouldn’t just move out without selling their property. Why should the owner of a policy “move out” without first finding out what the real value of their policy is?
In the midst of growing demand and dwindling resources, it is now all too clear that the long-term care funding crisis has arrived. The problem for America is that most basic of economic principles — supply and demand. The “demand” of seniors that need (or will need) long-term care is growing at a much faster rate than the “supply” of resources (dollars) to pay for their care. This demographic-economic reality has forced the government to reduce benefit levels and raise barriers to entry for the three primary entitlement programs: Social Security, Medicare and Medicaid. The harsh reality is that more of the responsibility to fund retirement and long-term care is being pushed back on the individual (and their family).