Whether you’re heading into retirement or already enjoying your “golden years,” safeguarding your nest egg is a top priority. After all, you worked hard to save and deserve to enjoy the fruit of your labor. But did you know something as routine as a nursing home stay could wipe out your entire life savings? In the first part of our series, we talked about how Medicaid can help protect your retirement funds from nursing home costs if you qualify. Now let’s explore how long-term care insurance and Indiana’s partnership program can do the same. 

What is Long-Term Care Insurance?

Similar to medical insurance, long-term care insurance helps pay for medical expenses from nursing homes, assisted living, in-home care, and adult daycare. While we typically think of long-term care as being permanent, policies also pay for temporary stays that often result from a severe illness, falls, or strokes. Coverage amounts vary depending on your specific plan, so it’s always a good idea to read the fine print. But they generally pay up to a daily or monthly maximum until you reach a total max dollar amount for your plan (more help on that below).

Who needs Long-Term Care Insurance?

Simply put, almost everyone. It’s estimated that 7 out of 10 people age 65 and older will require some kind of long-term care, and most retirees don’t have enough saved to cover the costs. Sadly, the expenses could wipe out your savings, leaving the surviving spouse with little to nothing to live on. And if you think Medicare or your supplement will cover your costs, think again. Medicare only pays for long-term care in very few cases meeting extreme eligibility requirements.

Long-term care insurance may be the right option for you if:

• You can afford the premiums
• You have assets to protect
• You don’t have enough assets to pay for long-term care and live comfortably after
• You’re reasonably healthy without a disability or illness putting you at high risk for long-term care

Keep this in mind: the older you get, the more expensive the policies. So, the best time to shop is between ages 45 and 60. But even if you’re above that age range, it’s never too late to sit down with a trusted elder law attorney to discuss your situation.

What are your options? 

If you don’t qualify for Medicaid and your retirement savings aren’t big enough to handle long-term care expenses, purchasing a policy specific to your needs can be a wise move. Insurance can be bought directly from a private company, or an independent agent can shop around and possibly find you a better deal.

Hoosiers can also take advantage of the Indiana Long Term Care Insurance Program. The program helps cover additional costs in the event you meet the total maximum amount the private insurance company will pay. To qualify, you simply buy insurance from a private company enrolled in the program. Unlike the traditional Medicaid program, stringent criteria don’t need to be met for eligibility. And you don’t have to spend down your life savings, meaning your nest egg may go untouched. But there are some caveats to be aware of. The amount you can save will differ depending on your policy, and some (not all) of your savings may need to go to long-term care costs. But even so, this program works like secondary insurance that costs nothing to join.

Look, we get it. Retirement, estate planning, and insurance can get complicated. And protecting your life savings shouldn’t be left to just anyone. At BB&C, we’re here as a dependable partner to help you wherever you are on your financial journey. It’s never too late to get the conversation started. Reach out today to Abigayle Hensley at 765-742-9066.