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Responsible People Buy Long Term Care Insurance

responsibleOh, they also keep their cars insured and their homes insured and perhaps even have a liability umbrella policy over these two as well.  This only makes sense since an auto accident or a windstorm could bring significant unexpected costs.

Many of us have not had an auto accident in years (knock on wood) and the odds of a homeowners claim is less than one in twelve hundred.  But HHS in Washington says that by the time we reach age 65, odds are that 70% of us will need Long-Term Care (LTC).

It seems odd to ignore the one risk that can cost us far more than our homes or cars.  Those costs are going up, for a number of reasons.  There are a lot of us baby boomers and none of us had 12 children.  Some of us had none, while most have 1-3.  Where will all the workers come from to care for us as we age and need assistance with day-to-day activities?

What happens to wages in any industry when not enough workers apply for the jobs?  Minimum wages have gone up all over the US, and McDonald’s workers are picketing for $15 per hour, a doubling of minimum wage.  The New York Times said that by 2020, more Americans will be working as caregivers than work in retail.  Wages will have to go up to induce people to take this career path.

Cost have been doubling every 15 years in the past, but going forward with shortages of people willing to do this work, costs will increase faster.  It may seem ridiculous to think that a $10,000 per month nursing home will cost $40,000 a month in 30 years, when todays 55 year olds turn 85.  So let’s go back 30 years to 1986 when a new Ford Mustang was $7500 and a postage stamp was $0.22.  The median income that year was less than $25,000.

Yes, costs will increase which is why good LTC insurance policies contain an automatic 5% compound inflation factor on the daily or monthly benefit. Some agents might leave this off to make their product seem less expensive, but they are not doing you any favors when you find yourself spending down your savings to Medicaid impoverishment.

The insurance does not need to be expensive, and most people find that they do not need as much as they might suspect.  When care is needed, many of the toys, cars, trips, cruises, golf, even dining out goes away.  Thus “fun” money can be directed towards the costs of care.  Interest or yield on savings can also help without touching the principal.  Only the shortfall needs to come from some other source such as LTC insurance.

There are a number of companies offering this insurance, with widely varying prices.  Investigating with someone who has access to many insurers AND who knows how LTC is used and its costs where you live can save you a significant sum.

At TheLongTermCareGuy.com financing LTC is our only business.  No matter if you are planning ahead or already in care, we can probably help even if it’s simply some good advice.  Give us a call at (920) 884-3030 and let’s see how we can help you.

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The Long Term Care Guy