What is the least expensive type of long-term care?
Most people ages 65 and older will need some form of long-term care at some point in their golden years and that care can be costly. So, it's important to prepare for this additional cost as you plan your retirement.
On the other hand, there are a few different types of long-term care, some more expensive than others. As such, you may be wondering what the least expensive type of long-term care is and how much money it costs.
Get long-term care insurance now to cut the cost of your care.
What is the least expensive type of long-term care?
There are several different long-term care services, but they all typically fall into one of three categories. Those include:
- Home healthcare: This includes home health aides and any other long-term care support you receive at home.
- Assisted living communities: This type of long-term care provides housing with round-the-clock staff to help with basic daily living activities.
- Skilled nursing home: Skilled nursing homes are like assisted living communities. However, these homes offer skilled nurses who provide a higher level of care than you can expect to receive at an assisted living community.
So, which is the least expensive? According to the Genworth cost of care survey, the least expensive option for 24-hour assistance is an assisted living community. That care will cost you an estimated $59,007 annually. Home healthcare comes with an estimated cost of between $65,004 and $67,504 per year depending on the level of care you need and skilled nursing homes cost an average of between $103,700 and $118,457 per year.
Get long-term care insurance now to make sure you can afford care when you need it.
Why you should cut this cost with long-term care insurance
No matter which option you choose, long-term care can be quite costly. However, you may be able to cut that cost with long-term care insurance. In fact, you should purchase long-term care insurance "as early as possible because rates go up as you get older," explains Kelly Gilbert, fiduciary investment advisor at EFG Financial in Grand Rapids, Michigan.
"However, in reality, many people cannot afford it when raising a family or paying off college debt. So, the age range of 50 to 59 is usually the top of the bell curve." Regardless of when you decide to purchase a long-term care insurance policy, it may be an effective way to cut the cost of your care. Here's why you should get coverage as soon as possible:
Long-term care insurance isn't a use it or lose it product
Many people don't give long-term care insurance a second thought because they believe it's a use it or lose it kind of product. So, the thinking goes, if you don't need long-term care, you're just throwing away money. But that may not be the case.
"The options for long-term care insurance have changed over the years," says Gilbert. "No longer must you buy the use it or lose it type of coverage. Today, we can buy a policy that has a death benefit payout if you never need to use the coverage."
So, you don't have to buy long-term care insurance as a bet that you'll need care. Today's options mean you can purchase this type of insurance as a safety net while planning to give your estate a boost.
Self-insuring doesn't make sense for most people anymore
"Some people decide to self-insure with a large savings account because all they know about long-term care insurance is the old style of use it or lose it. But today you use that self-insured account balance to fund a policy with a death benefit," explains Gilbert. "So, self-insuring just doesn't make sense anymore."
You may face additional taxes in the future
Those without long-term care insurance often lean on state-provided coverage as much as they can if the need for long-term care arises. Unfortunately, that's causing strain on declining Medicaid budgets. What's that mean? If the trend continues in this direction, increased taxes for elderly citizens without long-term care insurance may be on the horizon.
"Recently, due to declining Medicaid budgets, many states are exploring a State Medicaid Tax on anyone that does not have a long-term care policy," says Gilbert. "So, this may also be another reason to begin exploring a policy for yourself and your loved ones even earlier."
Get long-term care insurance now to ensure your access to care when you need it.
The bottom line
Long-term care can be expensive. But you don't have to cover the cost on your own. You can reduce your cost with long-term care insurance. However, it's important to act now. After all, premiums for this type of coverage usually rise with age.
