Dealing With Long-Term Care Costs
Life expectancies have increased significantly and are expected to continue to increase in the future. As people age, however, they are more likely to develop conditions that limit their ability to live independently. Thus, as life expectancies increase, so does the need to make provisions for long-term-care costs. If you are wondering how likely it is that you will need to deal with long-term-care costs, consider the following:
• Almost 70% of those who are currently age 65 will require long-term care before they die. Care will be needed for an average of three years, with 20% requiring care for five years or more (Source: Center for Retirement Research, April 2007).
• Currently, the average annual cost for home care service is $34,000 and for a private room in a nursing home is $75,000 (Source: Center for Retirement Research, April 2007).
• Approximately half of private-pay nursing home patients run out of funds during their stay and must then use Medicaid funding (Source: Center for Retirement Research, April 2007).
• Almost 72% of nursing home patients are women (Source: Financial Planning, April 2007).
• By 2005, only 6 to 7 million people had purchased long-term-care insurance (Source: Center for Retirement Research, September 2007).
• The average age to purchase long-term-care insurance was 61 in 2005 (Source: Center for Retirement Research, September 2007).
• In 2006, approximately 20% of applications for long-term-care insurance from individuals aged 60 to 69 were declined, while 42% of those aged 70 to 79 were declined (Source: Financial Planning, April 2007).
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