After reviewing life insurance/long term care hybrid coverage options, the question comes down how much LTC coverage is sufficient? There are two separate questions: how much you’ll need, and how long will you’ll need it. The best reference source on cost is Genworth’s annual cost of care survey.
For length of time, here are national statistics complied by a Montana LTC guide:
36% stay less than 1 year
32.5% stay less 1 – 3 years
14% stay from 3 to 5 years
17% stay 5 years or longer
Claims statistics show about 15% will last for more than 5 years, so depending on the source and projections, those requiring LTC for 5 years or longer is about 1 in 6. The worst case scenario of 5 years or longer that’s expensive to cover. There’s memory loss, stroke, osteoarthritis and Parkinson’s Disease, being over 85 can cause extended periods of not being able to perform 2 out of 6 activities of daily living. Women are much more likely to need LTC than men, about 2/3rds of the claimants are women.
The risk of Alzheimer’s and other cognitive conditions that’s may compel one to want a more extended LTC coverage. It’s the major cause of LTC claims. There is a genetic component then murkier causes that may be lifestyle or environment. Probably because I wonder if memory loss is going to affect me, I have an ongoing interest in this subject.
Tierra del Fuego
In many ways contemplating one’s 70’s, 80’s and 90’s is like a journey towards the high latitudes. Tierra del Fuego, the end point down the long Andes spine, comes to mind. There are storms followed by periods of calm, followed inevitably by more severe storms. The better shape one’s in potentially the journey will fare better, but there’s a point where a sled may be required for the remainder of the trip.