Family Decision; Do You Really Need Long Term Care Insurance?

The change in the family demographics due to severe economic changes for the past decade has created an extensive need for Long Term Care. Rather than focusing on the need for Long Term Care and Long Term Care Insurance, let’s focus on the changes within our families which is actually one of the key causes of needing Long Term Care Insurance.

Let’s go through the changes and the impact of economic conditions on our families:

• Dual income families were created: Our family structure is not how it used to be. We do not have one bread-winner and one house-maker anymore. Most families have both of the spouses required to work to accommodate the needs of the families. Further more, younger children may even have to work to contribute to the family income.

• Fewer Children: The cost of having children has become increasingly expensive. Not only the basic needs of children, the increase cost of education and health care became a big concern, which consequently caused families to have fewer children.

• Children in later years: Besides having fewer children, couples started focusing more and more on their careers and their economic well-being as they postpone to have children in their later years of marriage.

• Single parent household: Besides the economic conditions, there maybe more than one reason for this incident, yet one way or another, number of single parents has been in the rise for the past decade.

• Sandwich generation: Due to having children in later years of their lives combined with the aging baby-boomers, families who have to take care of their younger children as well as their parents at the same time have been in the rise for the past decade. This indeed becomes a bigger concern when both spouses have to work to provide for their families.

• Geographical dispersion: This is in fact one of the biggest dilemmas that occurred in our country. Children and relatives have moved far away, looking for work or pursue careers, as it became harder for families to live close by, yet along under the same roof.

We also need to add the recent medical improvements into this equation: It is a well known fact that the recent medical improvements provided longer life span for Americans. If you compare the average life expectancy of Americans in 1900s versus 2000s, you will notice that there is a significant increase in the life expectancy of our people from 40 years to 80 years. However, living longer doesn’t necessarily mean living healthier throughout your life. The prolonged life expectancy also brought illnesses such as Alzheimer’s, dementia, etc.

When we consider the recent economic changes the way that they impact on our lives, it becomes much more apparent that living longer combined with the changes in our family structure and demographics resulted in circumstances where children may not be able to meet the needs of their aging parents. Because of this, elderly may have to rely on professional help, which of course comes at a cost.

This cost can in fact be put into three categories:

• Cost of loss wages related to taking off from work in case of a Long Term Care situation.

• Cost of loss wages for people who have to take off from work to care for the person who is in Long Term Care situation.

• Cost of Long Term Care that a person has to pay.

After taking above realities into account, it should become quite obvious that paying for Long Term Care can become a considerable economic burden on families as well as for the person who is in need of Long Term Care. Consequently, considering Long Term Care Insurance should be one of the foremost options to avoid this burden to protect your wealth, income as well as your independence.