Insurance Best Practices
WHO NEEDS LONG-TERM CARE
INSURANCE?
SEVEN QUESTIONS TO HELP DETERMINE IF YOU DO
Submitted by Tracy Timmerman
Published: October 2, 2008
In most people’s minds, they
are still in high school. But every now and then, a
stray white hair or wrinkle will catch their eye, and
they wince. Retirement is creeping up on a majority of
the Baby Boom generation, and soon, advanced age will
prevail, and the majority may require assistance with
their day–to-day routine.
You may not have realized
that assistance with the day-to-day activities of daily
living, no matter if it is given in your own home or in
a nursing home, constitutes long-term care. So how can
we prepare for this eventuality? Long-term care
insurance may be an answer. Let’s see if this type of
insurance is right for you.
1) Do you want to pass
down your wealth or property to your children?
Nursing home care costs at least $192 a day (in 2006
dollars), according to a 2006 Older Women’s League (OWL)
report on women and long-term care. If you do the math,
that could mean close to $70000 per year. That kind of
cost can drain your financial reserves or retirement
nest egg quickly, leaving you with no “legacy” to pass
on to those whom you care about.
2) Do you intend to qualify for state aid?
Most people are misinformed about state programs.
Medicare covers only a limited amount of long-term care
services, while Medicaid covers some long-term care
services – primarily care in a nursing home – for people
who have limited income and assets.
3) How long do you think you will you live?
How long did your grandparents live? And their
grandparents? Advances in medicine and the knowledge of
human health have increased the average lifespan by a
few decades. So chances are, you will live longer than
your grandparents. But as you age, the chances that you
may need long-term care increase.
4) Will your family members be able to care for you,
as you age?
Many women are sandwiched between caring for
children and parents. In fact, the changed structure of
the family has resulted in most women working to help
support the family, and someone with enough time to care
for another adult is rare. Additionally, family members
are more geographically dispersed. What options may you
have in your future?
5) Are you a woman?
Women generally outlive their spouses, lessening the
likelihood that they will be cared for by their spouse.
In fact, women make up 67 percent of all nursing home
residents, according to the 2006 OWL report.
Additionally, women may be less prepared financially to
pay for long-term care services, if they don’t have
adequate pension or other financial plans in place for
themselves.
6) When will you want to retire?
Baby Boomers are working longer and retiring at an
older age. But just because you plan to retire at a
later age does not mean you should not consider
long-term care insurance. Conventional wisdom
recommended looking at purchasing long-term care
insurance between ages 60 and 65. Experts are now
recommending that people as young as 50-years-old or
younger begin the process. Remember, the older you get,
the more expensive the coverage is and the likelihood of
health complications increases.
7) How healthy are you?
You can become injured or ill enough at any age to
need long-term care. If you wait until you are older and
begin developing the health conditions that normally
accompany aging, the coverage will be more expensive or
may be difficult to obtain.
You may be thinking, “Where
is the question about whether or not I can afford
long-term care insurance?” You should be asking, “Can I
afford not to have long-term care insurance?” Today’s
long-term care insurance products include options and
choices, such as elimination benefit periods and daily
benefits amount, that can help make your coverage more
affordable. You may want to start investigating those
options now. Contact your insurance agent to get more
information on the types of policies available.
Tracy Timmerman is with
MassMutual’s Levin Financial Group in Tampa, Florida.
You can reach Tracy via e-mail at [ttimmerman@finsvcs.com]
or by calling 727-687-3778.
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