The price tag for these often vital policies are ever on the rise and show no sign of slowing down.
For many people, the type of coverage that is provided by long term care insurance is an absolute necessity, because if they reach the point that they are no longer able to perform their own daily living activities – such as dressing, bathing, grooming, and preparing their own meals – they would not have the financial ability to pay for the assistance that they would require.
Among those without coverage, these costs are the most common cause of running retirement accounts dry.
Long term care insurance is often a determining factor as to whether or not the carefully saved retirement funds will actually be able to hold up throughout the life of the individual. However, the price of that coverage has been on the rise, and that trend is showing no signs of slowing down. In fact, the increases appear to be getting steeper. This could cause a smaller number of people to be able to afford the already expensive coverage and could lead to financial disaster I the future.
Only a small percentage of Americans now have long term care insurance, primarily because of the cost.
According to an expert in retirement financial matters, Jack VanDerhei, who is also the Employee Benefit Research Institute research director, very few people in the United States have this coverage or have enough of it. That said, “If people run out of money, it’s often because of long-term care costs.”
The current types of insurance policy that are available provide a set pool of money that may be used for various forms of care – such as the cost of nursing homes – that are not covered by health insurance policies and that are costly enough that they would rapidly cause a retirement savings to run dry.
Unfortunately, as the premiums for long term care insurance become increasingly cost prohibitive, it appears as though the percentage of Americans who will have this protection upon their retirement will steadily decline. As a generation the size of the baby boomers now starts to progress through retirement, this could be a defining financial period in the country.