Include long-term care insurance in financial plans

We all know that, as the old adage has it, It is later than you think.  Occasionally, I also say it is LIGHTER than you think.  In this light let’s not look back in anger or forward in fear, but around in awareness.—James Thurber, U. S. humorist and cartoonist

Most of us envision ourselves living a long life, investing and planning throughout our working years to create a financially secure future where we can enjoy spending time doing the things we enjoy the most.

In my office, I see many folks who are doing the above-described planning, but who have no idea of the potential impact that needing long term care may have on their assets, their family and their future.

The reality is that the longer we live, the greater the likelihood that we may require long-term care.  The costs associated with needing long-term care are significant.  It may take decades to accumulate the assets you’ll need to retire comfortably; but just a few years of paying for long-term care may threaten a lifetime of savings.

Waiting to address your long-term care needs until the point at which you actually need care may significantly impact your financial situation, your quality of life, and your ability to maintain your independence.  Incorporating long-term care insurance into your financial plan can help protect your assets, reduce the burden of care that would otherwise fall on family members, and enable you to receive care in the seeing you most prefer, including your home.

Remember, I do not sell long-term care insurance, but there are plenty of fine people who do.  You should look for a broker you trust and at least sit down and talk about it.  Failing to plan for disability in our futures can be devastating to us and to everyone who loves and depends upon us.

Nearly everyone finds it difficult to see themselves needing hands-on assistance with basic living activities like bathing, getting dressed and eating.  So they avoid thinking about it all together.  The U. S. government reports that 70% of people who reach age 65 will require long-term care services at some point in their lives.

The AALTC, (American Association for Long-Term Care Insurance) prefers to say that a person’s real risk is either 0% or 100%.  The real question – and the bigger risk – relates to the length of time for which you may need to receive care services.  Your plan must prepare for the risk of needing care that could last many years.

Should you purchase insurance that you may not need?  When you think about it, we hope that we’ll never have to file a claim on our homeowners, automobile, or life insurance policies.  However, that doesn’t stop us from owning coverage that protects against real risks.  The same is true for long-term care insurance.  The financial risks are too high and the potential burden to loved ones is just too great for us to do nothing.

The families of claimants rarely talk about financial benefits.  Instead they talk about how insurance allowed mom to be cared for at home, or how dad was at a much nicer assisted living community located closer to the family.  Additionally, today there is a much larger menu of long-term care insurance products than there was in the past.  There are such features as return-of premium options and life insurance or annuities that provide benefits to those who are concerned about never needing care.

Remember, Medicare covers very little, if any of the cost for long-term care, and is restricted largely to specific illnesses and injuries and for short periods of time.

Medicaid is the joint federal and state welfare program for those with low income and financial resources.  Each state operates its own Medicaid program, which has created major budgetary issues for many states.  Other federal programs such as Veterans Affairs, do pay for some LTC services, but only for specific populations and in specific circumstances.

You will never be younger or healthier than you are today.  That’s the reason to start planning now, when you have the most options.  The average age for new individual long-term care insurance applicants is 57; an age when many are able to qualify for good health discounts.  This discount reduces costs and remains even if your health changes.

Long-term care is an issue of particular importance to women.  Women are often impacted as providers of care for spouses and, ultimately, as recipients of care.  Planning is especially important for women living alone.  Women tend to live longer than men and are far more likely to need long-term care.  The majority of nursing home residents and those with Alzheimer’s disease are women.

To begin working this out for your own family, start with questions like, Where do I ultimately want to receive care?  (at home?  In an assisted living facility?) What does care cost where I live now, or where I plan to retire?

For millions of Americans, celebrating an 80^th, 90^th and even a 100^th birthday is increasingly likely.  When you live a long life, there is a very high risk you will need the type of care that’s referred to as long-term care.

Check out the American Association for Long-Term Care Insurance at their website,   www.AALTCI.org.

Thank you for reading.  Stay well.  See you next week.