NEW YORK (MainStreet) Britt Minsky wasn't aware of the high cost of nursing care until her 80-year-old mother moved into an assisted living facility in Georgia a year ago. For $3,600 a month, Minsky's mother receives 24-hour nursing care, three meals a day and lodging in a dormitory-sized room that fits one person.
"Imagine how much it will cost when I am 80 years old," the 52-year-old said. Minsky has since begun exploring the possibility of purchasing a long-term care insurance policy that would cover her own costs of nursing care if and when she needs it.
"I'm realizing that planning ahead is necessary when you're aging if you want dignity and quality in retirement," Minsky told MainStreet. Without proper planning, paying for long-term care can be a devastating financial burden for adult children, because elder care can be just pricey as putting a teen through four years of college. The average annual cost for nursing home residency in 2013 was about $87,000. While the cost of long term care insurance dropped for men, it inched up for single women, according to the American Association for Long-Term Care Insurance (AALTCI) 2014 Long-Term Care Insurance Price Index. A $164,000 long-term care insurance protection policy costs about $925 a year for men compared to $1,225 for single women.
Although rates vary from insurer to insurer, women were charged higher premiums in 2013 overall, because they live longer than men.
"Women account for two-thirds of the $6.6 billion in claims paid by insurers last year," said Jesse Slome, director of the AALTCI. A healthy 55-year-old man can expect to pay 15% less for long-term care insurance coverage compared to last year, and a 60-year-old married couple faces a 7% increase.
"Adding an inflation growth option builds your benefits over time but it can double the base cost of coverage," Slome said. A policy with inflation protection is also known as a benefit increase rider, which increases benefits annually whereas a policy without inflation protection decreases in value on an inflation adjusted basis yearly.