Myths About Long Term Care
Insurance
Find out more about long term care and long term
care insurance. Test your knowledge with the following
statements; are they true or false:
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I don't need long term care insurance
because the government will pay.
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I don't need long term care
insurance because my family will take care of me.
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I don't need long term care
insurance because I can save on my own.
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I cannot afford to purchase long
term care insurance.
I don't need long term care insurance
because the government will pay. False. Medicare is a government welfare program that pays for acute
care needs such as hospital stays and physician visits. It
only pays for skilled nursing home stays following
hospitalization. Medicare also limits help at home primarily
to those who need skilled nursing care and rehabilitative
therapy.
Medicaid long term care programs primarily pay for the poor
and those who use up their financial resources. Most
Americans pay for long term care out of their own pockets.
I don't need long term care insurance because my family will
take care of me.
False. With the advancements in technology, family members live
farther and farther apart. More families are also depending
on dual-incomes to maintain their lifestyles.
With 70 million baby boomers reaching old age in the same
period of time, family members may not be available, and
even if they are, most of us would rather not be a burden to
them.
I don't need long term care insurance because I can save on
my own.
False. According to the American Council of Life Insurance, a
two-year nursing home stay could cost about $500,000 in
forty years' time. Therefore, a 45-year old would have to
save about $3,500 per year for 40 years and achieve a 7%
annual return, to fund the expense at age 85.
Can you save for your retirement, pay for your children's
education, and save for your long term care needs?
Years to Save Until Age 85 |
Annual Savings Needed |
With 8% inflation, 8% Investment Return |
With 10% Inflation, 5% Investment Return |
20yrs. |
$23,736 |
$75,266 |
30yrs. |
$9,589 |
$34,061 |
40yrs. |
$4,196 |
$18,733 |
I cannot afford to purchase long term care insurance.
False. Annual premiums could be less than $500 per year, depending
on your age, medical history and the degree of coverage that
you seek.
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