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Long-Term Care Insurance:
Cost of
Long-Term
Care
The late Senator John Heinz was one of the first to understand the need
to have a plan for long-term care:(Paraphrased)
The greatest threat to the
financial security of Americans is the cost of long-term care. (We) can
insure our cars against theft or damage, our houses against flood,
fire, and earthquakes, and our families against the risks of an early
death. But when it comes to insuring our single greatest threat to our
life savings and emotional reserves, the costs of long-term care, few
Americans have long-term care insurance. In many ways, it's as if we
are all wearing bullet proof vests with holes over our hearts.
Average Cost of
Care
In Your Area
Click
here to find the cost of care in your area
The actual costs of long-term care
vary
widely and depend on 3 major factors:
1. Geographic location
As with all living expenses, the cost
of
long-term care will depend on the part of the country where the care is
received. As a general rule, care will be more expensive in major
metropolitan areas such as New York, Boston and San Francisco.
2. The Place in which the care is
received
In most cases, care provided in
assisted
living communities will offer a better value than nursing home care,
and in some instances, even home care.
Here are some average costs of care
to be
used for comparison purposes only- the cost will also depend on the
geographic location and the level of care required.
Home Care:
Average monthly cost for basic care is $2,880
Assisted Living Communities:
Average
monthly cost is $2,640
Nursing
Homes:
Average monthly cost for a private room is $6,260. The average monthly
cost for a semi-private is
$5,850.
3. The reason(s) for care
The severity of the condition causing
the
need for care can vary the costs by thousands of dollars per month.
The Importance
of
Considering Inflation
The most relevant figures are not the costs of care today, but the
projection of what those costs will be in the future.
Between now and 2015, it's predicted
that
long-term care expenses will rise at an annual rate of between 4% and
7%.
But after 2015, the increase in demand
for
LTC services could result in inflation rates approaching double digits.
Silent Costs of
Long-Term Care
The costs of care from a line-item standpoint do not tell the entire
story. The physical, emotional, and psychological impact to family
caregivers, as well as lost income opportunities, must also be included
in any discussion pertaining to the true costs of long-term care.
Few family caregivers accurately
anticipated the number of hours per week they would eventually devote
to caregiving, or the months or years the care would be needed. The
majority estimated they would need to provide care from 6 months to 2
years. The actual average length of family caregiving is 8
years!
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