COVID Pandemic Highlights the Need for Long-Term Care
- October 8, 2020
- Phil Cannella
- 0 Comments
Long-Term Care protections gained in popularity at the beginning of 2020 as the Federal Government passed the SECURE Act into law which had drastic implications for IRA and 401(k) accounts. With the elimination of the stretch IRA and new liquidity rules for beneficiaries, investors looked for different ways to pass money to their heirs, which included investing in long-term care coverage. Shortly after January, more investors became interested in long-term care as the COVID-19 pandemic raged in the United States and seemed to impact the senior community much more dramatically than any other age group in the population. The impact of the pandemic has reinforced the need for long-term care among seniors and those nearing retirement in the United States, not only for their health but for their finances.
From February 1, 2020 to the middle of September, the Center for Disease Control (CDC) reported more than 180,000 deaths in the United States as a result of contracting the COVID-19 virus. In total, 80% of deaths resulting from COVID-19 complications happened to men and women who were 65 or older. As of September 12, 2020, 182,095 deaths were reported by the CDC and 143,787 of them were individuals aged 65 or older. To break down these statistics further, women over the age of 65 made up 85% of deaths; while men over the age of 65 made up 74% of COVID-related deaths.
Not only has the COVID-19 pandemic disproportionately targeted and impacted seniors and those nearing retirement, but it has also taken place overwhelmingly in healthcare facilities. Nearly 125,000 deaths occured in a healthcare setting, with more than 5,000 dying in hospice, and 39,000 in nursing homes or long-term care facilities. According to CDC data published by the Center for Retirement Research, 93% of all COVID deaths in the United States occurred in medical settings, many of which seniors and retirees depend on later in life.
Since the time of this data’s publication, deaths resulting from COVID complications have risen above 200,000; however, the trend among deaths has remained the same. The significance of this data spotlights the benefits of long-term care protections for patients who wish to stay in their own home while receiving necessary care. Entering one of the aforementioned medical facilities for care would increase the likelihood of contracting, and worse dying from, the COVID-19 virus. Therefore, individuals nearing the end of their career or enjoying life in retirement may be dissuaded from admitting themselves in the future into a medical area for fear of inadequate protection from known and unforeseen events.
Aside from deaths, men and women above the age of 55 experienced the second largest increase in unemployment from February’s lowpoint to April’s peak, according to the CDC’s data published by the Center for Retirement Research. Thus continuing the disproportionate effect of COVID-19 on those in or nearing retirement. A total of 13.1% of women and 9.4% of men 55 or older lost their jobs amidst the COVID-19 pandemic which is significantly higher than the unemployment increases among those that were in the same age group during the last market crash and economic recession in 2008.
While many workers nearing the end of their career worry about the possibility of being forced into an early retirement, seniors in general have faced a high level of adversity all throughout 2020. Given the inordinate number of deaths occurring in places like long-term care facilities and other medical related establishments, it highlights the need for long-term care insurance among investors who desire to stay in their home as they age to avoid the uncertainty of a situation similar to what has taken place throughout 2020. Even for those who have lost their job so late in their career because of the pandemic, the benefits of long-term care extend beyond the health of the recipient but also offer protections for a recipient’s finances. While there is an abundance of long-term care insurance plans available for consumers, meeting with a licensed retirement phase expert can narrow down which options would best suit a consumer’s health and financial needs.
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