Long-term Care Insurance Explained

  • By Nathan Fort
  • 28 Nov, 2017
Long term planning with options and plans from Arbor Mutual.

It can be uncomfortable to plan for a future where you might be limited by old age or illness. However, the chances of such an outcome may be higher than you think. People who are currently 65 years old have nearly a 70 percent chance of needing long-term care at some point in their lives.1

Luckily, you can offset future care costs by a substantial amount if you invest in long-term care insurance.

What Is Long-term Care Insurance?

Long-term care insurance is a financial plan that allows you to use benefits when you need to pay for long-term daily care. This includes assistance with basic day-to-day activities, nursing home costs and more. A person may need to tap into their long-term care benefits if they lose their mobility or are diagnosed with a serious ailment, for example.

Why Should I Consider Buying Long-term Care Insurance?

Employer-based health insurance and Medicare do not cover the long-term daily care needed by many older Americans. Medicaid will cover those costs, but if your income is too high, you will have to reduce your assets to qualify. In most states, you cannot have more than $2,000 in assets and collect Medicaid. This can leave you in a financially unstable situation.

Who Can Buy Long-term Care Insurance?

Most people invest in long-term care insurance in their 50s and 60s. For the lowest premium costs, buy earlier when you are healthier. Most financial professionals recommend waiting no longer than your mid-50s to sign up.

Be aware that you may not qualify if you already have a preexisting condition or cognitive impairment. This doesn’t necessarily mean you’re out of luck; it just means you may need to apply to more companies before your application is accepted.
Planning for retirement or long term care is easy with savings plans from Arbor Mutual.

Where Can I Use My Benefits?

You don’t necessarily need to be in a hospital or nursing home to make use of your long-term care benefits. A surprisingly large number of situations can be covered by these benefits, including:

  • In-home care
  • Nursing home stays
  • Assisted living costs
  • Adult day care visits
  • Respite care

When Will My Insurance Kick In?

A nurse or social worker will assess your condition and decide whether your benefits should be activated. Typically, you are eligible if you cannot perform two out of the six activities of daily living (ADLs).

  • Bathing, showering or taking a sponge bath
  • Accessing the toilet
  • Using the bathroom when needed or changing catheters or colostomy bags
  • Getting in and out of a bed or chair
  • Putting on clothes and medical accessories
  • Eating by mouth, feeding tube or IV
Once your benefits are triggered, you will likely need to wait through an elimination period before you can use them. This can be 30, 60 or 90 days long. Any care you require during this time will, unfortunately, have to be paid for out of pocket.

How Will the Process Work?

You can use your benefits to pay for care fees until you hit your daily maximum. Your plan will also have an overall lifetime maximum. For some plans, you may be allotted a daily amount of money, regardless of how much you use.
Costs can add up with assisted living facilities. We can help at Arbor Mutual.

Pros and Cons to Consider


  • Tax Deductions – Certain long-term care insurance plans are tax-qualified. This means you can deduct some of your health care costs from your taxes.
  • Spouse Plans – If you are married, you and your spouse can enroll together. That way, if only one of you requires long-term care, you can pull from a larger pool of money.
  • State Partnership Programs – Some states designate certain private plans as partner policies. If you run out of benefits, these partner policies make it easier to get Medicaid and allow you to keep more assets.
  • Independence – You may have loving family and friends who are willing to help you with your daily care, but you may not want to impose such a heavy burden on them.  
  • Peace of Mind – By investing in long-term care insurance, you are putting your health first and saving yourself from unexpected financial devastation.


  • Limited Coverage – While a few plans do offer unlimited coverage, most insurance companies have cut coverage back to a few years. This is because they need enough money to consistently pay for people’s care.
  • High Costs  – Some people find long-term care insurance too expensive. Insurance costs vary by company, so compare quotes. You can select your level of coverage and opt in or out of special protections to reduce your cost.
  • Premium Increases  – Insurance companies may hike up premiums if the costs of long-term care exceed what they expected. Request a history of price increases to avoid being sucked into endless premium hikes or having to drop your plan because of cost.
  • Use It or Lose It – Like many other types of insurance, you only see the benefits of long-term care insurance if you actually need long-term care. The money goes away if you don’t use it.

Assisted living can be financially devastating if you don't plan in advance. Arbor Mutual can help with those needs.

Protect Your Quality of Life and Retirement Savings with Long-term Care Insurance From Arbor Mutual Wealth Management 

Investing in a 401(K) or IRA and receiving a pension from your work are great ways to safeguard your financial future, but they may not be enough. At Arbor Mutual Wealth Management, our team of financially savvy advisors will clarify the confusing world of investment and retirement savings options to ensure you retire with your money as secure as possible. Our basic services include long-term care insurance options, principal protection, income planning, IRA & 401(K) rollovers, IRA legacy planning, estate planning, life insurance and Social Security and pension management. Call (866) 332-1761 today to take your first step toward a more secure financial future.

1 https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html

By Nathan Fort 28 Nov, 2017

It can be uncomfortable to plan for a future where you might be limited by old age or illness. However, the chances of such an outcome may be higher than you think. People who are currently 65 years old have nearly a 70 percent chance of needing long-term care at some point in their lives.1

Luckily, you can offset future care costs by a substantial amount if you invest in long-term care insurance.

By Nathan Fort 01 Nov, 2017
Is your estate plan up-to-date? If not, you’re not alone. Several recent surveys have asked Americans of all age groups whether they have an estate plan or will, and the numbers are not confidence inspiring. One survey, performed by Caring.com, reported less than half of their adult respondents had a will or living trust. A USLegalWills.com survey from June 2016 suggests roughly 71% of Americans don’t have an up-to-date will.

Those numbers are slightly better for seniors. The USLegalWills.com survey found roughly half of seniors had an up-to-date will, and the Caring.com survey suggests slightly more than half, 58%, of baby boomers had estate plans in place. The same study asserts a less-worrisome 81% of seniors 72 and older possessed estate planning documents.

People are certainly living longer, which is one of the reasons many Americans put off establishing an estate plan, but the future is notorious for being uncertain. There are no guarantees of longevity for anyone, which is why it’s advisable for every adult to have some form of estate plan in place, whether it’s just a basic will or a complex series of living and revocable trusts.

The big question, from a wealth management professional’s standpoint, is how do you convince the majority of Americans that, regardless of age, having an estate plan is essential? More fundamentally, what is it that’s holding people back from developing an estate plan?

Is it simply that they’ve never thought about it? A lack of motivation? Discomfort with thoughts of mortality? The answer is likely a combination of some or all of these factors.
By Nathan Fort 30 Oct, 2017

No hard-working American wants to lose their entire paycheck as soon as they receive it. Even so, many of us are guilty of crossing the fine line between necessary purchases and splurge buys, sometimes without realizing it. Even if an individual has a solid grasp on their spending habits, their lifestyle choices may be costing them more money than they realize in the long run. If you’re hoping to set aside more of your salary for savings and investments, it may be time to cut costs in your everyday life with these simple tips.

Shop Smarter, Not Harder

One of the largest weekly, biweekly or monthly expenses in most households is grocery shopping. Grocery stores are strategically designed to tempt you into spending more money on items you don’t need, so it’s vital you enter the store with a plan every time you shop.

Start with a meal plan. If you’re stocking up on the household groceries, you’ll need to ensure you get enough food for the period between shopping trips while spending as little as possible. Planning out your meals for the week will help refine your shopping list and prevent you from purchasing unnecessary items. You may also want to plan your meals around your budget. Red meats, for example, are particularly pricey when compared to white meats. The smart spender may choose to take advantage of sales, coupons or bulk packages to save money on future grocery trips.

If you make a quick trip to the store to pick up a few things, avoid grabbing a basket or cart. The extra space could tempt you to grab items you never needed.

The easiest and most cost-cutting way to save money while in the store is to purchase as many generic or store brand items as possible. There’s a cheaper store brand product of similar quality for almost any name brand item you can find.

Reduce Electricity Usage

Staying up long after the sun sets and waking up before sunrise can cost you in electricity. While most people will need to use electricity for lighting, many homeowners and renters end up spending far more money on their electric bills than necessary because they stay awake late into the night. Try to line up your circadian rhythm with the cycle of sunlight to reduce electricity use after dark.

Homeowners can also remove one enormous electricity hog with only a string and some clips. Your clothes dryer, if it’s electric, is one of the largest drains on electricity in the entire home. Save money by doing things the old-fashioned way. Drying your clothes on a clothesline is just as easy as a dryer and can improve the longevity of delicate garments. Dryer heat is extremely damaging for many articles of clothing. Not only will you save money on electricity by opting for a clothesline, but you’ll also save money on clothing costs in the long run!

Grow Your Groceries

If your yard is just a patch of grass or dirt with no real use, it’s time to repurpose it! Cut down on pointless lawn water bills and decrease your grocery bill by growing vegetables in a garden. Gardening is a fun and exciting way to connect with your food and a great hobby for individuals of all ages.

Enjoy a Bright Financial Future with Arbor Mutual Wealth Management

With only a few minor changes to your lifestyle, you can cut your spending and put that extra money toward providing for the future. If you’re interested in building a nest egg for retirement or making your money work for you, you can find help from the experts at Arbor Mutual Wealth Management. Our financial professionals will help you establish your financial goals and create a plan to help you attain them. Contact us online or call (866) 332-1761 to receive a free consultation.

By Nathan Fort 31 Aug, 2017
If you find finances confusing you’re not alone. Millions of Americans struggle with understanding retirement savings and investment vehicles, and for good reason. Many are complicated and seemingly designed to be as confusing as possible.

Some of the most daunting saving options are annuities. What makes them especially confusing is they’re often associated with insurance and sold by insurance carriers, but in essence, it’s an income stream. So what exactly is the deal with annuities?
By Nathan Fort 08 Aug, 2017
Economists and financial planners are likely still startling awake in the middle of the night, sheets drenched in sweat, with the nightmare of September 15, 2008 fading back into the recesses of their subconscious.

That was the day Lehman Brothers collapsed under the weight of the bad bets they made on subprime mortgage lenders, resulting in the largest bankruptcy in history.

You may have heard the term subprime mortgage tied to the financial crisis, but what exactly are subprime mortgages, and how did they torpedo the U.S. and ultimately the world economy?
By Nathan Fort 21 Jun, 2017
You likely hear a lot of conflicting advice about how to manage your retirement savings , especially when it comes to 401(k)s held through an employer. How often should you adjust allocations? Should you try to micromanage it with the limited options you’re given? Should you update it annually, biannually or monthly?

One commonality you’ll find among most sources is an emphasis on the role time plays in your 401(k) strategy. How much longer do you have until your retirement? The old adage that you continue reducing risk as you get closer to retirement is one of those entry-level 401(k) best practices for which there’s generally unanimous support.

This risk reduction can be safely examined through a lens of decades and years. If you start taking advantage of matching funds in your late teens or early 20s you will likely have 50 or more years of 401(k) investments to look forward to, so investing aggressively when you’re young gives you a chance to experience better growth on a smaller amount and take on more risk during a period of your life when you’re not exactly relying on your 401(k) for an immediate income stream. Even if a bear market were to hit a young investor, their 401(k) still has several decades in which to recover.

That being said, if there’s a bear market on the horizon, and at any given time you can hear opposing viewpoints on the likelihood of that, then you may want to consider adjusting your allocations to more defensive positions that are less exposed to the negative repercussions of market pullbacks. Whether or not you do this is dependent on your outlook on the market and whether you think the likelihood of a bear market is becoming an inevitability.

So How Do I Invest My 401(k) More Defensively?

When it comes to equities, or stocks, there’s always inherent risk. The market can fluctuate, scandals within a company can arise and recalls and lawsuits happen, just to name a few potential scenarios that can result in the rapid devaluation of a particular company’s stock. Bonds, on the other hand, are almost universally viewed as safer for a variety of reasons.

1. Bonds are, in essence, a guarantee that the lender will receive face value once the bond has matured.

2. Typical bonds pay a fixed interest which are guaranteed by the issuer and are part of the bond’s terms. This is different than the dividend payments some stock holders receive, which are entirely dependent on the issuing company’s business and management style.

3. From a long-term standpoint the bond market is typically more stable and less volatile than stock markets.

That being said, with little risk comes little reward. Although bonds can be traded and pay out a minimal interest to holders, they don’t have the growth or dividend potential equal to equities.

Some Other Potential Tips to Insulate Your 401(k)

You generally only have so many options when it comes to your 401(k)’s allocations. Keep in mind that small-cap companies have more growth potential, in most cases, than large-cap companies whose big growth days are behind them. But with large-cap companies generally comes more stability and less risk.

International stocks are another potential growth option given the global economic climate, but if there are big pullbacks in Asia, Europe and elsewhere it may be a good idea to divest out of international and move more toward domestic bonds.

If you have the option to invest in index funds you can also consider index funds that are designed to be bear proof. There are certain industries that maintain value and in some cases even grow during a bear market or recession. People, regardless of the economy (or in some cases maybe because of it), will continue drinking alcohol or smoking. They will likewise continue to need health care and other standard services such as electricity, waste disposal, internet and household goods such as toilet paper or toothpaste.
If you don’t want to get entirely out of equities but fear a bear market is inevitable, you may want to research various index funds that are designed to act as a hedge by including these types of recession-resistant industries.

Talk to the Local Austin Area Retirement Experts

If you want to learn more about growing your nest egg while protecting it from potential bear markets or pullbacks, Arbor Mutual Wealth Management can help. Our investment and retirement portfolio strategists excel at helping our customers truly understand their options, establish goals and map out a path to a comfortable retirement. Enjoy peace of mind knowing your money is headed in the right direction by calling (866) 332-1761 and scheduling a free retirement checkup!

http://time.com/money/3144708/heres-the-right-way-to-protect-your-401k-from-the-next-big-market-drop... http://time.com/money/4259056/protect-retirement-bear-market/ http://www.401khelpcenter.com/401k_education/allocation.html#.WTBu_evytQI http://www.investopedia.com/articles/retirement/08/401k-info.asp

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