Why You Need to Purchase Long Term Care Insurance

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Why You Need to Purchase Long Term Care Insurance

Have you purchased a high-coverage Long Term Care (LTC) insurance policy? If not, why not?

Lately, when my college-age son hears either of his parents rant and rave about what is happening in the health care and benefits world, he has become fond of saying: “The only solution to health care issues is to be and stay healthy and wealthy.” Well guess what? He’s right!

But if you are not already wealthy, what can you do now so that when (not if, the “if” odds are never in our favor) you become unhealthy, you can afford care?

 

Purchase Long Term Care Insurance!

I often say, “show me an 80+ year old client in need of care with $500,000, and they will likely not have enough funds for care over the next 20+ years of their remaining life. But show me a 70 year old client with $100,000 and a great LTC policy and you’re looking at a client who will likely never run out of funds for care.”

Case in point: I was appointed as the Plenary Guardian (where the client’s delegable rights are transferred to the Guardian) for a woman in mid-2008. She had a fantastic LTC policy that reimbursed nearly every cent of her LTC costs from mid-2008 until the summer of 2013. That’s more than five years.

Image Credit: Alan Cleaver
Image Credit: Alan Cleaver

Now, let’s do some simple math. Her LTC reimbursed more than $260K at an average of $4,333 per month. It would have paid indefinitely, even if she lived for another 15 years. (For reference, we have clients upwards of 103 years old.)

What kind of investments, luck, or magic would have created that kind of income for her during these difficult economic times we’ve recently been facing? Even if the client had invested her money rather than paying the LTC premiums, would those investments been available and on the upswing when she needed them over these past 5 years?

Because of the client’s great LTC policy, we didn’t have to deal with the whole Medicaid mess. We didn’t have to move her to a lesser-quality facility when the cost rose steadily each year. We were able to private pay for the services she needed and wanted, and we didn’t have to significantly tap into her other investments, which were able to recover (somewhat) from the bad economic times. This means we didn’t have to tap into the family inheritance that she and her husband worked so hard to create for their children.

To secure a good LTC policy, you need to be young and healthy, so do it NOW. Don’t wait. Find a trusted, knowledgeable agent (or two or three), and get informed. Read all that you can so that you understand the many choices in LTC policy options. Then, get a good LTC policy. Start to take care of your future now so you have what you need when you can no longer take care of yourself.

I don’t sell LTC policies, but as a frequent user of these types of policies for clients, and seeing what they can do to preserve funds and increase the quality of care and life, I am a BIG supporter of LTC policies.

Senior care professionals know the need to have funds for care later in life (a cost that is not likely to go down). And the only way to avoid wading through government programs and requirements, limited providers, constantly changing assistance programs and networks, and more, is to have CASH to pay for your care.

The way to ensure you have enough cash to pay for your needs when you’re older, even with a modest nest egg, is to have a great LTC policy.

Of course, there’s always plan B – you could go live with your kids. 😉

 

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00a7e40This blog is shared by Theresa Barton, the expert behind The Guardian Network with more than 25 years of experience in the field of Elder Advocacy, Care Management and Guardianship. Learn more about Theresa’s work and resources for families, caregivers and health, support and legal professionals here.

 

 

 

 

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