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How to Prepare for the Long-Term Care Crisis


October 28,19 | 12:00 am

By 2030, for the first time in U.S. history, our country will have more 65-and-older residents than children. And by 2035, there will be 78 million people 65 years and older, while those under the age of 18 will number 76.4 million.

Our country’s population is aging quickly, which means it’s becoming increasingly difficult to find enough long-term caregivers to cover the growing need. The reasons for this are many, but chief among them is that the role of a long-term care provider often does not pay well. As such, these difficult jobs are resulting in high rates of turnover. And according to a report by the Paraprofessional Healthcare Institute, the nationwide shortage of caregivers could get even worse.

The shortage of long-term care providers is a leading cause of the rising cost of care. Additionally, whether through wage pressure from competing industries or statewide policies, higher minimum wages have also led to higher costs. According to the Cost of Care Survey, between 2017 and 2018, the annual price for a home health aide increased 2.33% to about $50,336. The per-year median cost for homemaker services also rose from 0.24% to $48,048.

Unlike other developed nations, the U.S. does not have a public long-term care program. Resulting in the high cost of care to fall on seniors and their loved ones. For many American families, the financial, mental, and emotional burdens of assuming responsibility for this care is overwhelming.

How Your Family Can Prepare for the Caregiver Shortage

Thankfully, there are options that can help families prepare and pay for long-term care.

For those in their 50s or 60s and in reasonably good health, purchasing long-term care insurance can be a helpful solution. As with any insurance policy, make sure you shop around and pay close attention to the terms, costs, and benefits associated with a policy.

Another way for seniors and their families to pay for long-term care is through a life settlement. A life settlement is the sale of an existing life insurance policy to a licensed institutional buyer in exchange for a lump sum that is more than the cash surrender value and less than the face value of the policy.

How a Life Settlement Can Help

If you have an aging parent, a life settlement allows you to liquidate your parent’s life insurance policy and use the funds from the settlement to ease the burden of care.

As an example, Ashar Group helped negotiate the sale of an elderly mother’s $500,000 life insurance policy to secure a cash settlement of $200,000. These funds relieved her children of the $10,000-per-month financial strain required for her long-term care. “Her son once visited our office and told us that, thanks to the life settlement, it was the first time in 10 years that their mother hadn’t felt like a burden to him and his siblings.” – Jon Mendelsohn, CEO of Ashar Group.

Those of us who are children of aging parents understand it can be challenging to talk about finances. This is especially true when it comes to something as significant as how to pay for short-term as well as long-term care. But there are options that can help you and your family surmount these challenges. With the right planning, your financial future can remain intact.

For more information on how the life settlement process works, and whether it might be an option for you, give us a call or take our 7-question policy value quiz. Our team of experts is dedicated to asking and answering the crucial questions that will help you make informed decisions. Though a life settlement isn’t right for everyone, Ashar Group can be part of the process of determining whether it makes sense for you and your family.

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