Financial strategies to cover long-term care expenses

Many Georgia residents will need to pay for some form of long-term care when they are elderly. According to the U.S. Department of Health and Human Services, about 70 percent of people will eventually need to enter a nursing home, move into an assisted-living facility or require in-home health care. The Cost of Care Survey conducted by Genworth Financial for 2016 showed that the median monthly cost of a private room at a nursing home was $7,698. People who can stay home but need support from a home health aide pay about $3,861 per month.

Financial planning earlier in life can prepare to meet these expenses. Long-term care insurance represents one approach, but premiums run high and such insurance is increasingly unavailable. Some insurance carriers offer an alternative that provides living benefits within a life insurance policy. When a policy holder meets certain conditions, the policy pays for care. Similarly, some annuity products will pay long-term care expenses. Another insurance product, known as an asset-based long-term care policy, requires a person to deposit a large lump sum that could then finance care in the future.

Many people who have not made any preparations for nursing home or in-home health care face the challenge of qualifying for Medicaid. The government requires people to spend down their assets in order to receive these benefits for a nursing home or other elder care.

When making plans for long-term care, people might want to meet with an attorney who could evaluate their financial position and suggest strategies for protecting assets and qualifying for Medicaid. In some situations, people might be able to transfer assets to heirs prior to needing care, which could insulate an estate from high health care costs.

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