Editor’s Note: Information contributed by Genworth Financial.
Did you know that at least 70% of people over age 65 will require some long-term care and 40% of people under age 65 already require long-term care? LTC costs are increasing beyond the rate of inflation – at a rate of about 4.35% yearly growth. That equates to over $17K annual increase in costs.
Now, more than ever, it’s vital to consider the implications of planning for the future.
How to Pay for Long-Term Care
There are four common ways to pay for LTC:
- Medicare: A federal program that requires co-payment and provides hospital and medical insurance to people 65 years or older and to qualified ill or disabled persons. Medicare has a number of strict requirements that need to be met before you are able to receive benefits. Some private insurance carriers will offer a Medicare insurance supplement program.
- Medicaid: Also a federal program; reserved for the indigent
- Out-of-pocket
- Private long-term care insurance: Often carriers offer two kinds of plans: Individual plans and group plans
Each of these methods of payment carry different implications. For most people, long-term care insurance (LTCI) will be vital in ensuring that life can continue to be lived in comfort. LTCI policies are varied based on location, facility chosen and other, more personal factors. It’s always best to look into long-term care insurance before you actually need it, as costs increase as you get older and health declines. Also, many states have long-term care partnership programs that can work with the policy of your choice.
While there are a number of different ways to build an individual plan, group long-term care plans can have huge benefits (metaphorically and literally) for both employees and employers.
Why Opt in for a Group LTC Plan: Employee’s Perspective
There are several reasons and benefits of opting into a Group plan:
- If your employer offers a group long-term care plan, then the costs may be considerably less than an individual plan.
- Group plans provide the dual comfort of helping you deal with something that can be an overwhelming burden – both financially and emotionally. They offer the same sort of financial protection that an individual plan can. They help you protect your hard-earned nest egg and any other assets while also shielding your family and friends from needing to pitch in financially.
- Group plans can further help ease the anxiety of not wanting to be a burden to your friends or family. They can ensure that you maintain your autonomy and don’t have to rely on family or friends to become caregivers.
- Group LTCI plans can also guarantee that you have the option of receiving care in the area of your choosing, a huge bonus as you may want to continue to live in an area you’re familiar with, in close proximity to friends and family.
Why Provide a Group LTC Plan: Employer’s Perspective
- On the employer side, there are also advantages to offering group long-term care insurance. It can be an attractive perk to be able to present to a perspective candidate and can certainly help retain current employees. By offering group long-term care plans, you’re helping your employees protect their assets. Showing you care about your employee’s financial well-being computes to more than a perk in the long-term.
- There are potential tax advantages for companies offering a LTCI benefit program. You should work with an insurance agent who is knowledgeable and can guide you.
- Being able to offer a contemporary LTCI program can also cut down on absenteeism for employees who otherwise would serve as caregivers to loved ones. That can increase productivity on your end.
Just as you want to protect your health, you want to protect your family, your assets and your business. Group long-term care insurance can help on all counts. There’s valuable information about long-term care plans available at Genworth.com.
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Photo by SCA Svenska Cellulosa Aktiebolaget.
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