In life, we always have options. And when it comes to covering the costs of long-term care, it is no different. In this article, I’ll share a few viable strategies you can use to help cover the future costs of care in our Aloha State. It is by no means all-encompassing and exhaustive, but meant to get you thinking on this critically important topic.
As a financial advisor, I believe more and more American’s understand the need for long-term care insurance (LTCi). And the first line of defense to ensuring quality long-term care is available when you need it is having a LTCi policy. But when it comes to providing long-term care, we are facing serious hurdles and dilemmas. First is the availability of LTCi. Twenty years ago, there were over 100 carriers providing LTCi. In 2020, there are less than 10 quality LTCi carriers. The fact that big players are withdrawing from the LTCi market is opening eyes and shaking things up. At my Honolulu practice, I also routinely see the difficulty of qualifying for LTCi coverage. Carriers have really tightened eligibility standards and constricted their underwriting requirements, especially for women.
Notwithstanding, individuals who want LTCi coverage certainly have options. And there are LTCi strategies your financial advisor can help you with, from spousal benefit sharing to eliminating “riders” such as inflation protection, which can help keep premiums within your budget. At the same time, one needs to remember the proverbial price of paradise truly is applicable to long-term care costs, as well. On the high end of the long-term (or extended-care) scale, the cost is steep. I have recently heard estimates as high as $1 million to simply enter a coveted long-term care facility on the east side of O‘ahu. Some may say that is exorbitant and overpriced, but it is reality. On the least expensive side, the lowest hourly rate for care is about $26 per hour.
When it comes to having LTCi options, the onus and responsibility for seeking out alternatives lies squarely on you. I encourage you to take the time to choose an advisor who is adept in this specialized area of planning. An expert well-versed in LTCi can help your family in more ways than one. When I conduct educational seminars on LTCi, my professional advice to participants is to get price quotes from several insurers.
MUTUAL OF OMAHA
1600 Kapiolani Blvd., Ste. 1200, Honolulu, HI 96814
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FREE LTCi Seminar Workshop
ʻĀina Haina Public Library, 5246 Kalanianaole Highway
April 28, Tues., 5:30 pm
May 2, Sat., 10:30 am