As health care costs continue to climb, there are four words you’re going to hear more and more over the next few years … “long-term care insurance.” It’s something more retirees — and pre-retirees — will want to seriously consider to prevent their savings from getting depleted as they age.

Here is a primer on long-term care insurance, as well as another long-term care option that can help further protect your retirement savings.

What is long-term care insurance?

Much like health insurance, long-term care insurance is a financial product designed to help you pay for the cost of care if/when you become ill or disabled. The primary difference between health insurance and long-term care insurance are the kinds of services they cover.

Long-term care insurance can cover a wide range of care and services generally not covered by health insurance Medicare or Medicaid. The services covered will vary based on the type of policy you select, but typically the kids of services a long-term care plan can cover include:

• personal and custodial care
• in-home care
• hospice care
• respite care
• costs incurred in an assisted living facility
• nursing home care, and/or
• costs associated with a special care facility.

Typically, those who benefit from a long-term care policy are those who are not sick to the point that they require hospital care or traditional medical services. Instead, they are individuals who’ve lost the ability to perform basic daily needs — like dressing, eating, bathing, using the bathroom, getting in and out of bed or chairs, and walking. A long-term care plan can also help people deal with the cost of chronic illnesses — including Alzheimer’s disease and permanent physical disabilities.

How does it work?

A typical long-term care plan will reimburse policyholders a up to a pre-selected daily amount for the services/care stipulated in the plan. Prior to purchasing a plan, individuals are offered a variety of coverage options.

Much like with health insurance, the premium you pay will depend on a variety of factors, such as:

• your age at sign up
• the maximum amount the plan will cover per day
• the maximum number of days the plan will pay for services/care
• your health at sign up, and
• the services and kinds of care you select to have the policy cover.

As a result of the customization, premiums can vary widely. But typically, the younger and healthier you are when you sign up for coverage the lower you premiums will be.

If your health is poor or you’re already receiving long-term care services, you may not qualify for a long-term care plan, which means the costs of care will likely be coming out of your savings.

So getting prepared now while you are relatively healthy and living independently is the best way to set your strategy, and plan for the security and independence you want.

Another available plan

Because long-term care coverage is expensive and may not cover every expense you incur as you age, a Friends Life Care Membership Plan can provide you with an added level of care to help protect your savings.

Many people with long-term care policies also join Friends Life Care because it allows you to transfer more financial risk by gaining access to a pool of money and gives you the wellness and care coordination, and support that are useful to you now and into the future.

Membership in Friends Life Care is a proven way to alleviate the caregiver burden on family or friends should you need care in the future. A Friends Life Care Membership can cost as little as $500 per year, but the average cost is around $2,500. The actual amount you will pay depends on the plan you choose as well as your age, health and other factors. If you and a spouse/partner join together, you may receive a discount.

A membership gives you access to a set amount of daily coverage from day one.

A plan counselor is available at 800-496-1985 to provide you pricing for the Friends Life Care plan you prefer.