Planning for the possibility that you'll one day need some form of long-term care is a women's issue, according to the American Association of Long-term Care Insurance (AALTCI). There are a variety of reasons why this is a topic of particular importance to women.
First, because women live longer, they spend twice as many years in a disabled state than men towards the end of their lives; up to three years longer if they live past 80. In fact, more than 70% of nursing home residents and more than 75% of residents of assisted living communities are women, with 85.7 being the average age at admission.
Related Content
Even if your goal is to stay in your home forever, long-term care may still come into play. The AALTCI also found that almost two-thirds of those who use home care for help with activities such as eating, dressing, and bathing are women.
It's clear that planning now for long-term care needs is a very smart decision. One way to ensure you'll have the care you need when you need it is to investigate long-term care insurance options, which can help cover these costs.
Here's everything you need to know:
What is long-term care insurance?
Long-term care is a type of insurance that helps cover expenses related to long-term services and support, including personal care, such as bathing, dressing, or eating, and custodial care in a variety of settings such as your home, a community organization, nursing home, rehabilitation, or another type of facility.
Long-term care insurance policies reimburse policyholders a daily amount (up to a preselected limit) for these services. When you buy the policy, you will typically select a duration (generally one to five years) and the range of care options and benefits that will be provided should you need them.
Is long-term care included with my existing health insurance?
Unfortunately, regular health insurance will generally not cover long-term care, and Medicare will only cover short-term nursing home stays under special circumstances. Long-term care insurance, however, covers a variety of expenses that come with aging, such as extended nursing home stays, home aides and assisted living.
It's smart to apply for long-term care insurance long before you actually need it. Once you have a preexisting condition, it will be very difficult to qualify. Additionally, the older you get, the higher premiums will be. According to the AALTCI, most people begin their long-term care planning between the ages of 52 and 64.
How long until my long-term care insurance kicks in?
After you purchase a plan, it takes an "inciting incident" for the benefits to kick in. For most plans, coverage begins after you are unable to do two of the following activities unassisted:
- Dressing yourself
- Continence (maintaining control over your bladder and bowels)
- Feeding yourself
- Transferring (being able to get in and out of a bed/chair)
- Bathing yourself
- Toileting (getting on or off the toilet)
How much does long-term care insurance generally cost?
The price of long-term care varies widely depending on your state, age and gender. Since women tend to live longer than men, their premiums are often higher. According to the AALTCI, the annual premium for a 55-year-old man in 2020 was $1,700, whereas the premium for a 55-year-old female was $2,675. There are also significant discounts for couples, with the average combined annual premium for a couple being $3,050. While this seems high, bear in mind that the average annual cost of a private room in a nursing home in 2020 is $105,850, according to the Genworth Financial Cost of Care annual survey.
Is long-term care insurance a good investment for women?
Like any insurance, whether or not you need long-term care depends on your unique health and financial situation and risk factors. One in four people now age 65 or older will face $50,000 in lifetime out-of-pocket long-term care expenditures. Because women typically live longer than men, they are at a higher risk for illness and disability that may require expensive care as they age.
If you have the financial wherewithal to pay for top-quality nursing home coverage out of pocket, then perhaps you can skip buying long-term care insurance. If you don't, then long-term care insurance may be a critical piece of your retirement plan. If you anticipate needing care as you grow old — and you're able to comfortably afford the premiums — then long-term care insurance can be a great way to contribute to your financial stability and peace of mind.
