10 things you should know about long-term care

REUTERS/Yves Herman

Here are the top ten most important things you should know about long-term care (LTC), as discussed in, Your Wealth & Life: Long-term Care: What to do now.

1. Long-term care refers to extended help with activities of daily living (ADLs), like bathing and dressing.
2. Some care is medical in nature, but most LTC is not medically driven.
3. Medicare does not pay for long-term care except in specific, limited situations.
4. Most people receive long-term care through home health aides, assisted living, or nursing homes
5. Nationwide, the average monthly costs for home health aides, assisted living facilities, and nursing home facilities are USD 3,861, USD 3,628, and USD 7,698, respectively.1
6. 85% of 65-year-old couples will use LTC and have LTC expenses (see Fig. 1).
7. The median couple age 65 today will use LTC for two years and spend roughly USD 184,000 over their lifetime, and 20% of couples will use LTC for more than 5 years at a cost of more than USD 500,000.
8. Women live longer than men and have higher LTC expenses, making it unlikely that their spouses will be able to care for them.
9. LTC expenses will result in financial plan failures 32% of the time for USD 1mn households, 9% of the time for USD 5mn households, and 5% of the time for USD 10mn households.
10. LTC insurance products can reduce failure rates, but due to caps in coverage there are no policies that can completely eliminate the expense risk entirely.

You can find more on each of these conclusions in our new report, "Long-term care: What to do now," published 7 September 2016.

Endnotes

1 Genworth, “2016 Cost of Care Study,” April 2016, https://www.genworth.com/about-us/industry-expertise/cost-of-care.html.

This report has been prepared by UBS Financial Services Inc. (UBS FS). Please see important disclaimers and dis-closures that begin on page 2.

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