The financial challenge brought about by the increasing cost of long-term care insurance is one of the major reason why it is one of the most ignored annuity. If we are going to take a closer look and study how long-term care insurance works, we might be able to realize that the benefits far outweigh the cost and cons of buying ltci. The amount of money required to purchase insurance for long-term care is typically less than the amount of money needed to pay for ltc expense. As a result, you still have money to leave to your heirs or family members. LTCI is a wonderful product, however, people are misguided, thus, it should be a responsibility for every individual particularly the baby boomers to educate themselves about the impact of long-term care.
As insurance brokers we hear this all the time “I’ll invest the money instead of paying premiums for insurance.”
For every $1,000 of monthly retirement income you want to generate from your own savings, you will need about $230,000 in assets, according to the Schwab Center for Investment Research.
For example, if you want $3,000 a month, or $36,000 a year, you would need savings of $690,000. That’s a conservative estimate, assuming that you earn 5.2% on your investments and live off the earnings without dipping into the principal.
For $6,000 a month you will need at least $1.3 million. Then there’s living expenses for spouse and family, maybe another $4,000 a month. You will then need over $2 million.
A $3,000 a month benefit policy might cost $1,000-$3,000 a year for the premium, depending on age, health and other benefit options chosen. The $3,000 a month benfit policy would include inflation protection that…
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