Long Term Care Insurance North Carolina - Invest Detroit

Navigating long-term care insurance decisions can be overwhelming, and the challenges will only increase after the recent presidential election.

The reality is that senior care will not be a priority for the incoming president and his nominees, especially with the rising federal deficits and unsustainable government debt. As a result, Americans will likely need to find alternative ways to pay for this essential care. While it’s estimated that 70% of people over 65 will need long-term care, only 3 to 4% have insurance coverage to help cover the costs.

Our neighbor experienced a fire a few years ago while they were on vacation. Before anyone realized what was happening, the fire had spread, and they couldn’t live in their home for almost a year. Fortunately, they had insurance to cover the rebuilding costs, but this event is rare. Would you go without insurance if there was a 70% chance of something happening to your home?

Long-term care insurance can provide a crucial safety net. As a former RN who helped care for my dad, I can attest to the immense difficulty of providing 24-hour care. Expecting a spouse, children, or a community to handle this long-term is unrealistic, especially as families become more dispersed and community support diminishes.

As much as we love our family members, taking care of someone day in and day out leads to exhaustion, frustration, and sometimes guilt. It’s a situation no one should face without a plan in place.

There are three main approaches when considering long-term care insurance, and no single solution is right for everyone. It’s important to work with an objective and knowledgeable broker or financial planner (ideally, a CFP®) to explore different options.

Here’s a breakdown:

  1. Pay-as-you-go coverage provides the most coverage for less money upfront but comes with the risk of rising premiums. Many people who bought policies in the 1980s or 90s face significant premium increases—sometimes double or triple what they originally paid. This can be a serious concern, especially as people reach the ages where claims often occur, and fixed incomes already feel tight due to inflation.
  2. Hybrid policies offer more guarantees by combining life insurance with long-term care benefits. These policies provide a death benefit, and depending on your age when it is issued, you can access about three times the amount you’ve paid into the policy if you need long-term care. This can offer peace of mind, as it provides benefits regardless of whether you need long-term care.
  3. Permanent life insurance policies with a critical or chronic illness rider allow the death benefit to be paid while you’re still alive to cover long-term care needs. Like the hybrid policy, as long as premiums are paid, the death benefit is protected, providing another option for covering potential care costs.

Long-term care insurance is often seen as a complicated decision, but it’s vital. With careful planning and the right advice, you can choose an approach that best fits your needs and ensures you or your loved ones are protected in the future.