Umbrella LTC

Long-Term Care Insurance

Long-term care (LTC) has been called "the greatest uninsured financial risk today." That’s because the majority of costs for extended care needed during recuperation from strokes, accidents, illnesses, and operations are not covered by health insurance or Medicare. Without LTC insurance, these costs are paid from one's personal savings and assets.

Only LTC insurance provides coverage for quality LTC that may be needed at any time in life. Today’s policies also recognize that most people prefer to receive care at home and offer flexible cash payments so that even friends and family members can be compensated for providing assistance. And because the first claim might be years into the future, it's essential to obtain your policy from a trusted source to ensure that customer service and insurer funding will be available at the time of need.

In both the health care and financial planning arenas, there is a great deal of confusion about the wisdom of purchasing LTC insurance. Here are some key factors that should be taken into account before making any decision about this important coverage:

Who will need LTC?

The chances of needing long-term care usually increase as you age, but long-term care may be needed at any age. It is important to recognize that at some time in your life you may require these services. Risk factors for needing long-term care include:

  • Life expectancy: The longer you live, the more likely it is that you will need long-term care.
  • Gender: Women are more likely to need long-term care because they live longer.
  • Married or single: If you are married and have adult children, you may be more likely to receive informal care at home.
  • Health factors: If poor health runs in your family, you could be at greater risk than another person of the same age and gender.

Guide to Long-Term Care, Wisconsin Office of the Commissioner of Insurance

How much does LTC cost?
The average annual cost of care in Wisconsin is:

  • $95,261 for a semi-private room in a nursing facility.
  • $55,621 for 44 hours/week of home health care with a home health aide.
  • $49,997 for a private one-bedroom assisted living facility.

Source: The Cost of Long-Term Care Services (2016), Mutual of Omaha 

Does it make sense to self-fund LTC?
Assuming LTC is needed for an average of four years, in 2016 dollars:

  • A semi-private room in a nursing facility will cost $381,044.
  • 44 hours/week of home health care with a home health aide will cost $222,484.
  • A private one-bedroom assisted living facility will cost $199,988.

These costs assume only one individual will need care; costs will increase if both spouses require care. The above costs are for basic care only and does not include special services, medications, and other expenses associated with extended personal care.

All such costs are funded by after-tax dollars, and the actual lifetime cost of care may be much higher when rising costs/inflation and loss of investment income are factored in. 

Member testimonial

"Almost twenty years ago in 1998, my wife and I attended a long-term care insurance seminar sponsored by WEA Member Benefits that was being held in the library where I worked. Before the meeting we didn’t know much about it, but a combination of what we learned that evening and then after some additional discussions with one of Member Benefits’ specialists, we decided to purchase the Transamerica policy we have now. One of the important factors in our decision was the fact that the company had been investigated by Member Benefits. Over the years we’d learned to trust their recommendations.

"Since 1998, we have paid approximately $40,000 in long-term care premiums. Three years ago my wife required long-term care—first at home, then in an assisted living facility, and finally in a memory care center. Transamerica has been a very good company to work with through each phase of the claims process, and to date has paid over $300,000 in claims. I am very grateful we have this insurance because it has enabled my wife to receive the quality care she needs.

"And finally, Member Benefits was here to help us again when they sent us a letter explaining what was going on regarding Transamerica’s plan to increase premium rates. They gave us the opportunity to discuss our options with one of the long-term care specialists. I called and we spent about 40 minutes reviewing our options and decided that it was well worth paying the increase to keep the excellent policy we have in place without making any changes.

"If you don’t have long-term care insurance protection, you owe it to yourself and your family to at least learn what your options are from WEA Member Benefits. I can tell you that 95% of my colleagues, the ones who don’t have this protection today, wished that they had made the same decision we did twenty years ago."

Don Holmen, Retired Librarian, Waunakee School District


LTC testimonial