Are Your Clients Prepared for Rising LTC Costs?
Over the years, we’ve observed significant trends in the long-term care market. While the cost of care among all providers has increased, facility-based care has grown at a much greater rate than home care.
If you live to 65, there is a 70% chance you will need some form of long-term care services, making it vital to create a sound financial plan for managing future costs.
Current Costs of Long-Term Care
The majority of claims are paid out for home care or assisted living facilities, which typically cost much less than nursing homes.
- Home Health Care Aide: The national median hourly rate for a home health care aide in 2023 was $33.
- Assisted Living Facilities: The national median annual cost for an assisted living facility in 2023 was $64,200.
- Nursing Home: The national median annual cost for a private room in a nursing home in 2023 was $116,800.
Projected Future Costs
As these costs continue to rise, your clients’ assets are at greater risk. Considering the average three-year claim, in 25 years, with a 3% annual inflation rate, the average claim for a private room in a nursing home will reach approximately $240,000 annually, totaling around $720,000 over three years.
Planning for Long-Term Care
Given these rising costs, it’s essential to plan ahead. In 2023, long-term care insurance firms paid out a record $14.1 billion in claims.
However, only 3% to 4% of Americans aged 50 and older are paying for long-term care policies.
Considering long-term care insurance can be a prudent step in protecting your clients’ assets and ensuring their families are not burdened with these expenses.
Contact your LTC Specialist for assistance with your cases today.