The Peters Township Source

One of the most difficult subjects in an individual’s life is to ask yourself the question: “What will I do when I can no longer take care of myself? Will I rely on my spouse, children, friends or the government?”

The late actor, Christopher Reeve (best known for his movie character Superman), at age 42 became paralyzed following an equestrian accident and required nine years of long-term care. The comforting news of this story is that his family had long- term care insurance. About 40 percent of those receiving long-term care are between 18 and 64. Still, a vast majority of individuals who need long-term care are over the age of 65 and generally need an average of four years of care.(1) Once a health condition has occurred, long-term care insurance may not be available. Planning for the unexpected and the inevitability is prudent. Not planning is risky.

Long-Term Care Insurance (LTC) is an insurance product that helps to provide for the cost of "Long-term care" care beyond a predetermined period. Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform the basic activities of daily living (ADLs), such as dressing, bathing, eating, toileting, walking, and getting in and out of bed or a chair. LTC insurance covers care generally not covered by health insurance or Medicare. Medicaid benefits are generally for those with little to no assets.(2)

Why do some individuals choose to buy LTC insurance while others do not? Attitudes about insurance, government, and family responsibility are influencing factors. Ask yourself about your own opinions on these subjects, as they will influence your participation with your financial planner. A certified financial planner who is involved in estate planning would never ignore a potential on-going annual expense of $75,000 to $150,000 in a sound retirement plan. Right now, the average rate for a private room in a skilled nursing home is $181 a day. By the time today’s 60 year-olds might need such care, the average rate will have risen to about $480 a day, or $175,000 annually due to inflation.(3)

LTC insurance is certainly an important aspect of a financial plan that could help protect a nest egg or an estate. It should even be considered by those who will have substantial wealth at retirement. LTC insurance is really a focus in retirement planning and a discussion with individuals in their 40s and 50s.

LTC is an alternative that should be considered in lieu of taking your chances when you can no longer care for yourself. The risks really are to your spouse and your family. What if your spouse is unable to care for you or your children live far away?

Certain LTC plans do provide coverage for assisted living, skilled nursing facility or home care. Home care normally entails home health aides and private duty care-givers that assist you with activities of daily living. Other types of care include adult day care, hospice services, and respite care. This is separate from medical care for illness or disease. Medicare does not pay for “custodial care”. A study by the U.S. Department of Health and Human Services states that people who reach age 65 will likely have a 40 percent chance of entering a nursing home.(4)

When thinking about a LTC insurance policy, consider: daily or monthly benefit options, length of benefit period, waiting period, inflation protection, your health and age. Each plan varies by company. A certified planning professional can help you sort through your options and explain the risk of inflation protection and waiting period.

This is a difficult subject and many more articles could be written on it. I do encourage you to learn more about LTC insurance in order to protect yourself and the quality of your retirement life.