If you own a home do you have homeowner’s insurance?

Sure, you do because if something major happens to your house you want to be able to replace it. In 2014 only 5.3% of all homeowners made a claim on their policy and this includes everything from fire to theft.

If you own a car do you have automobile insurance? The average automobile insured person files a claim once every 17.9 years or 5.6% and this is required in most states to have this insurance.

Now consider this if you faced a 75% likelihood that you would face a $200,000 expense and you could purchase insurance to cover that expense, would you?

For most retirees, this is exactly what they face. The expense is long-term care. Recent statistics show there is a 75% probability that someone age 65 or older will face some type of long-term care event in retirement. The cost in Raleigh is about $82,000 and for men, the average duration of care is 2.4 years and for women 2.6 years and that does not even cover people that have Alzheimer’s disease which can last longer than 10 years.  It is easy to see that the expense can easily exceed the $200,000.

Today people are choosing to address their long-term care needs in several ways:

  • Self-fund (most used option) – This is also known as having no plan and fails to leverage resources to their maximum potential.
  • Purchase traditional long-term care insurance, which is expensive and keeps rising each year.
  • Purchase a life insurance policy that has a long-term care rider on it.
  • Purchase an annuity that has a long-term care rider.

As an hourly consultant, I help people evaluate all the options. I can help you understand what is best for your situation before you purchase anything. The statistics are too great to ignore; if you aren’t prepared for a long-term care expense you could be putting your and your spouses’ retirement at risk.