RESOURCES The longevity factor
and long term insurance By Mitchell Carron
New England Financial, a MetLife Company
It’s a natural tendency to think that you will never need
long-term care, and planning for dependency seems so far away.
However, long-term care may be the greatest uninsured risk
people face.
Most of us want to live a long life; those of us with children
and grandchildren want to see them grow up and thrive. Perhaps
we’d like to start a new and different career after retiring,
or travel to different parts of the world. Thanks to advances
in medical care, sanitation, and food science, many of us
will have the opportunity to live long lives. In fact, life
expectancy has climbed during the past 100 years from an average
of 47 years to nearly 77 years1. This longevity revolution
is quite remarkable, but unfortunately is not without its
risks. If you live a healthy lifestyle, you can expect to
live longer. However, the longer you live, the more likely
you are to develop a cognitive or physical condition that
will result in the need for long-term care.
Long-term care is generally defined as assistance with activities
of daily living, such as toileting, bathing, dressing, eating,
transferring from one point to another, and continence. It
also includes care for a cognitive impairment from Alzheimer’s
disease or other form of dementia. Care services can be provided
by health care professionals and may take place in your home,
in the community, in an assisted living facility, or in a
nursing home.
While families still provide the bulk of care services, family
dynamics have changed dramatically over the past few years.
Women, who previously dominated the caregiving role, are in
the workforce in record numbers and may not able to provide
full-time care. There are also fewer children in households
today than in previous generations, more divorces, and more
single people living alone. Therefore, the number of family
caregivers will be even smaller in the future than it is today.
Many people think that their health insurance or Medicare
will pay for their long-term care needs. Unfortunately, Medicare
pays a limited amount of long-term care expenses, and health
insurance generally does not cover the custodial care expenses
associated with long-term care. These long-term care expenses
have the potential of depleting assets quickly:
According to the 2005 MetLife Market Survey of Assisted
Living Costs, the national average for a year in an assisted
living facility is $34,860.
Nursing home costs are even higher; a year in a nursing
home can cost $74,095 according to the 2005 MetLife Market
Survey of Nursing Home/Home Care Costs.
Long-Term Care Insurance can help provide financial independence
and choice, by preserving retirement assets and allowing you
to receive care where you want it.
The MetLife Mature Market Institute® has produced an educational
brief, “Purchasing Long-Term Care Insurance: Ten Key Considerations
for Consumers,” designed to help people make an informed decision
when purchasing this type of insurance policy.
Single copies are available free to the public by contacting
Mitch Carron, Financial Services Representative with New England
Financial at (516) 357-1809 or mcarron@ny.nef.com.
1. Older Americans 2004: Key Indicators of
Well Being, Federal Interagency Forum on Aging Related Statistics,
November 2004.
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