What Are The Risks?

Pretty Significant

In the broadest sense, the long-term care risks are personal and financial. What may be the impact on your life and on the lives of your caregivers?

At what costs?

In earlier responses to the risk question, I have provided lists of average costs reported first by MetLife and, in more recent years, by Genworth. It has gradually dawned on me, however, that, if you make the decision to acquire some measure of long-term care insurance on the basis of comparing the cost of the insurance to the cost of care, you’re very likely going to make a big mistake.

You could buy a hybrid policy with a guaranteed premium so that you’re protected against your cost increasing in the future. That’s good.

But my crystal ball broke a long time ago. How can you judge what the cost of care will be in the future? What care might you need? Care at home, in an assisted living setting, in a skilled nursing facility? When? For how long?

The October, 2017 issue of Consumer Reports published a very thoughtful and extensive article titled “Who Will Care For You? Understanding the facts about elder care and assisted living will help you and your family be prepared and protected.” It is well worth reading.

At the August, 2018 meeting of a group of about 20 elder law attorneys, I asked what, from their experience with their clients, was the typical monthly cost for an assisted living facility. The response ranged from $3,500 to $7,500 a month. Most agreed that the average fell within a range of $5,000 to $6,000 a month. If “memory care” is the primary concern, the monthly cost could be significantly higher.

Those numbers are large, but they are meaningless until they become personal. And dollars are often not the only cost. In many situations, the need for long-term care also creates a substantial indirect impact. Family caregivers re-arrange their personal and work lives to care for a loved one. Work loss and travel costs are tangible consequences, but also consider the effect of stress on the health of the long-term caregiver.