Before a New York resident makes the decision to purchase long-term care insurance, it is important to examine the exact likelihood that the insurance will ever be used. In fact, insurance companies often inform their soon-to-be clients that the likelihood of them ending up in a long term care facility is high. However, it may not be as high as you believe.
Thirty-three percent of women above the age of 65 will live their entire lives without requiring long-term care. Meanwhile, 66 percent of men will never require long-term care.
In most cases, individuals do not stay very long in long-term care facilities either, even if they do require such services. Ninety percent of men will never spend more than a year in long-term care. Twenty-five of women will never spend more than that in long-term care. Furthermore, of those who require long-term care, less than 50 percent will be there over six months.
Anyone who is considering the purchase of long-term care insurance should be fully aware of the above figures. However, these figures do not completely discount the value of long-term care insurance. Indeed, the extremely high costs of long term care could completely exhaust one’s cash reserves and life savings even if an individual only stays at a nursing home for six months.
Nevertheless, long-term care insurance is not the only solution available to families who want to plan ahead for the possibility of needing nursing home care one day. For example, the creative use of a charitable remainder trust could be one way for an individual to qualify for government assisted medical benefits without the need to deplete his or her life savings first. There are other ways to prepare for nursing home care as well, and a detailed look at an individual’s financial, family and health situation will reveal which way is most appropriate for a particular individual’s needs.
Source: Findlaw, “LTC (Long Term Care) Insurance: Risks and Benefits,” accessed May. 25, 2015