Assessing the Risks…

  • The odds of losing a car in an accident are 1 in 240 with an average replacement cost of $20,000. (Nearly everyone insures the cost of replacing their car.) (NHTSA, 1999)
  • The odds of sustaining major fire damage to a home are 1 in 1,200 with an average replacement cost of $175,000. (Nearly everyone insures the cost of replacing their home.) (NFPA, 1999)
  • The odds of needing nursing home care are 1 in 2 with an average cost of $125,000 for 2 1/2 years of nursing home care.  Only 6% of all Americans have long term care insurance to cover just that cost alone. (American Council of Life Insurers, March, 2000; U.S. Census, cited in LA Times, Sept. 29, 2000)

Assessing the Facts…

  • 60% of all Americans are expected to need long term care at some point in their lives. (Nat. Academy of Elder Law Attorneys, 1999)
  • 50% of nursing home residents exhaust their resources to pay for care.(U.S. Census, cited in LA Times, Sept. 29, 2000)
  • For a couple turning 65, there is a 75% chance that one of them will need long term care. (The Wall Street Journal, June 2000)
  • Family caregivers provide 80% of long term care; institutions such as nursing homes provide only 20%. (ALS Assoc. , 1999)
  • 75% of all Americans over age 40 will be diagnosed with a critical illness in the next 30 years. (Lotter Actuarial Partners, cited in Annuity Market News, October 2000)
  • Over 70% of people with Alzheimer’s live at home and receive 75% of the assistance they need from unpaid caregivers. (Understanding Alzheimer’s, Alzheimer’s Assoc., 1999)

Assessing the Costs…

If a person does qualify for Medicare coverage for nursing home care, Medicare will only cover the first 100 days of confinement.  In 2003, there is a co-pay of $105 per day for days 21-100.  Even if you already own a long therm care policy with a 90-day elimination period, you would spend $7,350 out of pocket to cover the Medicare co-pay over days 21-90.

  • The average cost of care in a nursing home was about $56,000 in 1998.(AARP, May 2000)
  • The average annual cost of nursing home care in some urban areas is $73,000 a year. (Guide to Retirement Living, Summer/Fall 1999)
  • Care in your own home can cost $100 a day or more. (LA Times, May 2000)
  • Medicaid pays the cost of care for only 7% of residents in assisted living facilities. (ACLI, March 2000)