Home Care
Aging In Place – What Is It? What Does It Cost?
Aging In Place – What Is It? What Does It Cost?
Everyone wants to age in place. People want to stay in their own home, with perhaps some help coming in occasionally to mow the lawn, clean, do laundry, perhaps some help with shopping. cooking, bathing, dressing – when help is needed with those things.
Of course we will be healthy, just slowing down a little. Aging in place allows us to keep the pets, stay in our home, be near our neighbors and church, and for many people is the desired way we live our golden years. Nobody wants to go to a nursing home.
Aging in place is very doable for many people. As long as the home is designed with a laundry on the first floor, the doorways are wide enough for a walker or wheelchair, we are able to get into and out of the building without barriers such as stairs or steps, we should be fine. Some changes like properly positioned grab bars in the bathroom for safety can also help.
But what if we need more assistance than the above mentioned adaptive devices? What if we need someone to shop for us, prepare meals, clean the house, do laundry, or even help us with medication management, bathing, and dressing? These are activities called Long Term Care (LTC).
Home care agencies can come into come into our home on a regular basis to help with those things. They can even drive us to the bank and other errands we might feel a bit overwhelmed by. However these services do charge an average of $90 for a single visit, which typically needs to be scheduled.
If you need a visit every day the cost can be $2700 per month. If only 3 are needed weekly the bill still tops out at nearly $1200 extra per month. This is in addition to the cost of maintaining the home, taxes, insurance, heat, light, water, etc. If services are needed for lawn mowing, snow removal, painting or maintenance, the costs are even higher.
Thus the question comes up, is it cheaper to age in place at home, or in an assisted living facility where you have your own “apartment” and meals are provided?
If you plan to age in place, perhaps it is wise to investigate Long Term Care insurance. This type of insurance can pay for the extra services provided by a home care agency. If your Social Security or other income is sufficient to pay for care of the home and it’s utilities, then the Long Term Care insurance can pick up your extra care costs.
Have you taken the time to investigate Long Term Care insurance? It must be purchased while you are still healthy enough to qualify for it. Prices can vary considerably from one company to another and it is very helpful to have guidance in choosing coverage that is appropriate and not excessive. It is also vital that the benefits keep up with inflation as it may not be used for a number of years.
Investigate with an expert who has 24 years of financing Long Term Care costs. Call www.TheLongTermCareGuy.com at (920) 884-3030 to schedule a time to look into this.
Will Your Empty Nest Sadness be Solved By Mom Moving In?
I listened to a public radio program this morning about empty nesters and what they do to fill the void when children finally leave the nest. A number of callers spoke of how a parent moved in when they could no longer function at home on their own anymore.
Having a parent move in when they need care may sound cozy, and for some families it is a wonderful experience. Mom may be a pleasure to host, she may help with gardening, cleaning house, and perhaps even assist with cooking.
On the other hand, she may eventually need help with bathing, toileting, medication management, and if there is any dementia, a host of other cares that will become necessary.
Sundowning is one concern several callers mentioned. This is when the dementia is worse in late afternoon and evening as logic and reasoning disappear. Getting someone calmed down and to bed can be as difficult with an adult as it was with children. We all remember driving a child around in the car until they fell asleep, and this may now become necessary again, regardless how much gasoline costs.
When someone you love and care about strongly resists bathing and does not want to be in water it can be quite frustrating. Worrying about their falling when you are not watching them closely prevents any chance of your relaxing. This can trap you in your own home as a 24 hour a day, unpaid caregiver.
Sometimes Mom or Dad have funds and can compensate you for your work as a caregiver. One of my clients recently contacted me with questions on a problem this caused.
His mother had lived with them for 18 months, and they provided all of her care in exchange for payment of $3000 per month. This worked well until her care became simply too strenuous for the two of them to handle. At that point they moved Mom to an assisted living facility where the 24 hour caregivers could handle all her needs.
About a year later Mom’s savings ran out and she needed to apply to Medicaid to fund her care. Medicaid requires complete impoverishment down to $2000 of assets and typically any life insurance must be cashed in as well. Medicaid also closely checks financial history to determine if any gifting was done in the 5 years prior to applying for Medicaid. Any gifts given during this time period are totaled and divided by the average cost of a nursing home to determine how long you are ineligible for Medicaid once you are down to $2000.
In this case, without a signed, dated and notarized work contract between Mom and her son and his wife, every check of $3000 for care was counted as a gift and Mom became ineligible for Medicaid. Son now digs into his retirement savings to pay back Mom the money she paid them for care. This of course triggers additional income taxes for son as retirement funds are withdrawn.
While it is a loving gesture to have Mom or Dad move in with adult children when care is needed, you need to ask yourself, are you emotionally and physically able to undertake what often becomes full-time 24 hour per day care?
For some the answer is yes, and becomes a wonderful experience. For many others what started as a new adventure becomes tedium and a physically impossible job better suited to professionals.
Your parents may not have the money to pay for care, nor the health to purchase Long-Term Care insurance. Let this be a lesson to those of us who do have the health to purchase this insurance. The premium is far smaller than the cost of the care it pays for.
If you do decide to investigate Long-Term Care insurance, do so with someone who understands how and where this care is provided, as well as accurate current costs. Bear in mind that when one can no longer use the fun toys and travel, a portion of income can go towards the cost of care. Interest on savings can help as well without depleting principal. Thus most people need less of the insurance than they might first anticipate.
While you might hope that this will never happen to you, Health and Human Services tells us that by the time we reach age 65, fully 70% of us will need Long Term Care.
At TheLongTermCareGuy.com we have over 23 years experience in guiding people with this insurance. Let us help you investigate, every situation is unique. Call us at (920) 884-3030 or (800) 219-9203 or look us up online at www.TheLongTermCareGuy.com
Think You Are Too Young To Worry About LTC? Think Again!
I just read that the Centers For Disease Control and Prevention (CDC) says “The percentage of adults aged 45 to 64 years who reported needing help with activities of daily living such as eating, bathing, dressing, or getting around inside their residences has increased nearly 50% from 2000 to 2015. This was published in their weekly Morbidity and Mortality Weekly Report on August 26th.
For years it has been known that 40% of the people needing Long Term Care (LTC) services in this country are between the ages of 18 and 64. LTC is not something that people can ignore until age 85. Just like car insurance, LTC insurance must be purchased while you are healthy – so you have it when you need it.
By 60 years of age, 25% of us cannot qualify healthwise to purchase LTC insurance. The great majority of people cannot afford to pay for such care out of pocket or savings for very long. This leaves them no alternative but to apply for a welfare program called Medicaid.
Medicaid will only pay for LTC when you can prove that you are completely impoverished. In most states that means you have less than $2000 left to your name and have cashed in your life insurance as well. A married spouse can retain use of the home and car but this goes back to the state – not your heirs – after last death.
LTC needs can last for many years. Alzheimer’s is only one of 68 different types of dementia. By age 65, one in eight have it. By age 75 it is one in four and by age 85 it is half of us.
This brings up another study published in the Journals of Gerontology: Medical Sciences that says “Older adults who do not exercise often – or do not exercise at all – have a 50% greater risk of developing dementia as they age”. Anyone with diabetes also faces a significantly higher risk of developing Alzheimer’s.
Will you wait until it is too late to plan for your LTC when your health changes? Or will you proactively investigate solutions while they are still available? The ability to pay for care not only prevents impoverishment, but gives you choices as to how and where your care will be delivered.
Give TheLongTermCareGuy.com a call to meet and see what you can do for yourself. We are experts who have done nothing but work with LTC financing for 23 years now. There are solutions for almost any budget. (920) 884-3030 or (800) 219-9203
Alzheimer’s Is Expensive
Alzheimer’s Disease is the 6th leading cause of death in America.
By age 65, one in eight has it. By age 75 it’s down to one in four, and by 85 fully half of us already have it. If you live long enough, its almost inevitable. Alzheimer’s is not preventable, and not curable. At first you will know that you have it, and are trapped in its progression.
At some point you will need help. Sometimes the children can retire early and move in to care for us 24-7. Most of us do not have that luxury – we will have to pay for home care or assisted living facility care. Most LTC, even for dementia, is not done in nursing homes anymore. Costs for dementia care are the highest range of assisted living billings, often up to $6500 per month.
How long can your budget last with this kind of an extra bill each month? Many other physical ailments can bring about a need for care too. Its all expensive, like a car accident with car insurance. Surely you insure that risk, so why not insure for LTC costs since 70% of us will need some (per HHS)?
I have seen some very inappropriate proposals given to consumers on Long-Term Care insurance. For most agents or financial planners this topic is a once in a while, also have product. They typically do not research all the options, and tend to suggest more insurance than will be needed, making the premiums far too high.
Before you think it is out of reach for your budget, contact a professional who can help you decide how much is appropriate for your situation, taking into account the lifestyle changes that occur when care is needed. We constantly hear “Oh, that is much better than we anticipated” once we meet with clients.
Consult with the experts. We have 23 years experience in the financing of Long-Term Care. We have solutions for anyone, regardless of finances or health. The best options are for those who are still healthy, but we can help everyone in some way. Give us a call at (920) 884-3030 in Green Bay or from anywhere at (800) 219-9203
Is Motel 6 WhereYou Plan To Retire?
Tom Bodette will leave the light on for you, but do you really want to stay there?
I surely do not! And I do not want to end up in a welfare nursing home either. Many people think that you get the same care on Medicaid as you would by paying for your care. The problem is the Medicaid reimbursement is so far below market rates only the Motel 6’s of nursing homes or assisted living homes will accept you.
You’ve planned to have a comfortable retirement, and unless you can afford 6 figures a year for a nursing home, or over $50,000 for a nice assisted living facility or home care, you should be looking into LTC insurance while still healthy enough to get it. Every year it is tougher to get this coverage, the benefits are shorter, and the costs are higher. Get it while the getting is good.
But you’ve heard that this insurance is very expensive. From proposals my clients have shown me, it is – when it is not appropriately chosen.
How does over $850,000 of benefits for a 65 year old (male of female) for less than $2000 per year premium sound? Say you pay this premium for 20 years until you are 85 years old. You spent less than $40,000 for over $850,000 of coverage, is that expensive? Is it affordable for you?
Today, less than 15% of Long-Term Care is done in nursing homes. Thus, just like flood or earthquake endorsement on your homeowners insurance, many people choose not to cover the nursing home, but purchase just enough LTC insurance to cover home care, assisted living facilities, or adult day care.
Then bear in mind that when someone needs care, their lifestyle changes drastically. No need for the second (or third) vehicle, vacation travel drops, less golf, boats, campers, motorcycles, etc. to support when they can’t be played with. Most people can cover a good part of the cost of LTC by simply repositioning the dollars from things they can’t do anymore. Interest on your life savings can help as well without depleting the balance.
OK – here is the fine print. 65 year old, male or female, buys a $70/day benefit. This plus available income and interest may be sufficient. It will give you 10 years of collecting when you need care and INCLUDES an automatic 5% compound increase on your benefits every year.
You pay $1980.94 per year for 20 years. On the 21st year you need care and file a claim which starts at $185/day (remember the automatic inflation included) and will increase over the 10 years you collect until it reaches $288 per day for a total of $852,603 paid out to you. If your care costs less, you get all the money for every day of care regardless.
If you can’t find a deal this good with an A+ rated company, no matter where in the USA you live, call (800) 219-9203 and talk to us at www.TheLongTermCareGuy.com
LTC Insurance is Too Expensive!
Lately I have seen clients shown proposals to purchase Long-Term Care insurance with premiums exceeding $10,000 a year for a couple. This is ridiculously expensive for most couples in their fifties, and is probably because the insurance amounts are way too large to be appropriate.
Some insurance agents who “dabble” in LTC insurance products think that everyone needs enough insurance to cover the entire bill. Perhaps they themselves have zero deductible car insurance, which makes no sense either.
If we have a car accident, most of us have some deductible that we will pay before the insurance pays the rest. The larger the deductible, the lower the insurance premium. With most car accidents, our lifestyle does not drastically change, but when LTC is needed, it does.
If one of a couple needs LTC, they are probably not driving anymore. Thus fewer cars, less motorcycles, boats, campers, snowmobiles, ATV’s, etc. will be needed. There will be less trips to Branson, Disney World, cruises, even less going out to dinner when one has a difficult time going anywhere.
Professionals who specialize in LTC planning take these things into consideration. We try to help our clients predict how much of their monthly income is actually required to pay the basic bills, and with less toys and travel – how much of the bill for LTC they can pay out of pocket.
In addition to monthly cash flow, many people can also contribute the interest their savings earn, without touching the principal. Often, the total between available cash flow and monthly interest will cover a significant portion of LTC costs. Only the shortfall needs to come from LTC insurance.
Here is an example for a 65 year old couple. They want to be able to pay for home care and assisted living facility care without using up their life savings. If they do not need to support 2 cars, the extra Corvette “summer car”, the boat, and they understand that when one cannot travel, that expense drops to zero as well, they can pay the majority of the cost of home or assisted living facility care.
Many people plan for just those costs as very few people today need the care of a nursing home, especially if they can afford their home or assisted living care.
In their case it is determined that an additional $2000 a month from LTC insurance will suffice. At age 65 for each, and both in good health, they can purchase that coverage with a 10 year benefit when care is needed, including an automatic 5% compound inflation rider on the monthly benefit for less than $2000 a year each.
With the automatic, built in 5% compound inflation on the benefits payable, by age 85, a 10 year length of claim can give them over $850,000 from the LTC insurance to pay for their care.
Let’s review, at age 65 they purchase LTC insurance that will give them over $850,000 to pay for care over 10 years starting if care is needed at 85, for $1900 a year. Is a premiumk of less than $2000 a year expensive for that?
If you have been shown sky high premiums for LTC insurance, you need to shop around before you buy. Talk to someone who has over 23 years experience in planning for LTC, and can help you size coverage appropriately. Just give us a call at TheLongTermCareGuy.com at (920) 884-3030 or (800) 219-9203 and lets investigate. But don’t wait until your health fails, becasue then it may be too late, for you.
Where’s The Disconnect
This post, in it’s entirety, is reprinted from a chapter in the book “Surviving Alzheimer’s with Friends, Facebook, and a Really Big Glass of Wine”, written by my very good friend Honey Leveen, a first rate Long-Term Care insurance agent in Houston, TX
“Where’s the Disconnect?” by Honey Leveen, The Queen, by Self-Proclamation, of Long-Term Care Insurance
Insurance disclaimer: The following is based on the author’s personal experiences and opinions.
Much of the legacy we leave may be measured by how honestly we’ve dealt with life’s most painful truths. Often, such truths are the most obvious, yet hardest to see clearly.
I’ve specialized in long-term care insurance (LTCi) since 1990. That’s a long time. I’ve seen a few hundred of my nearly 3,000 clients collect from policies I’ve sold them. This is just the tip of the iceberg, however; many more will need to collect from their LTCi as time goes on.
I see scenarios just like Dayna’s [as described in Surviving Alzheimer’s] play out again and again. For different reasons, when a parent needs LTC, family members who’ve always gotten along well may find themselves at odds with each other. It is exactly as Dayna describes. The absence of sufficient, readily available money to swiftly access long-term care (LTC) aggravates an already highly stressful situation.
People who own LTCi also commonly suffer familial dysfunction similar to Dayna’s. What makes things so different for them is that their LTCi policies pay out significant, meaningful amounts of money when LTC is needed. This is often a huge game changer. LTCi tends to subdue the emotional discord Dayna describes. Relationships don’t suffer as much, and outcomes are better. The money people collect from LTCi provides them with dignity, choices, access, and options they would not have otherwise had.
Sadly, most of us still do not own LTCi. Sadder still, it is too often well-educated people with good incomes and a whole lot to lose who choose to be unprepared for LTC.
Such people come up with what they think are fabulous excuses to avoid discussing what might happen to them at the end of their lives. There seems to be a disconnect between our intellect and our emotions when it comes to LTC planning.
According to www.longtermcare.gov and other reputable sources, at age 65, there’s a 70% chance of needing LTC. These odds go up with each year we age. Visit Genworth’s Cost of Care Calculator (find it in the Resources area of www.honeyleveen.com) to see just how expensive LTC is in your locale.
Most LTC in the US is provided on an unpaid basis, disproportionately by women, who often have to sacrifice their careers, savings, and relationships to provide care.* LTC already costs American families dearly, yet the worst of this crisis is yet to come.
As former First Lady Rosalynn Carter said, “There are only four kinds of people in this world: those who have been caregivers, those who are caregivers, those who will be caregivers, and those who will need caregivers.”
Here are some simple responses to major misconceptions about LTC and LTCi. More complex answers are found on www.honeyleveen.com or by calling me, at no obligation:
LTCi is too expensive. Not true. What may be expensive is needing LTC for anything but a short time and not owning LTCi. Policyholders usually collect back all premiums they’ve paid over the life of their policy in a few short months. Premiums are customized for each person and can be made to fit into almost anyone’s budget. *
The government pays for LTC. The type of LTC the government pays for is not what you would freely choose. *
Medicare covers LTC. No it doesn’t! Medicare covers acute medical problems and a restrictive, conditional amount of home or in-patient rehabilitative care that most people don’t qualify for.*
The LTCi industry is threatened. It’s true that the number of carriers selling LTCi has shrunk; there are valid reasons.* Policyholders are not in danger.* LTCi carriers remain staunchly committed to the market. They realize the LTC crisis and oncoming Senior Tsunami isn’t going away any time soon, and are in it for the long run.*
LTCi only pays for nursing homes. The opposite is true. The great majority of LTCi policies pay comprehensively, for care at home, in adult day care, assisted living, and nursing homes. They enable you to increase the odds you will not need LTC provided in a nursing home.*
Here are some of many silly excuses smart people give me to avoid conversing about LTCi while they’re healthy and can find reasonable premiums:
My wife will take care of me. Really? Your wife will be eager and physically capable of helping you bathe and dress, for example? You don’t mind the thought of her last memories being about the physical, emotional and financial burdens of caring for you?
That won’t happen to me. Really?
My kids will take care of me. Really?
I’ll kill myself.
I can’t afford LTCi. Many people claim LTCi is too expensive, despite the fact that we tailor LTCi premiums to fit into most people’s budgets. Situations like this one happen frequently: an acquaintance tells me she can’t afford LTCi premiums. This person’s mother needed LTC for an extended length of time, at great sacrifice to the family. A week later this person announces she is making a two week trip to Mt. Everest Base Camp/African photo safari/Tahiti or another exotic locale, or is buying a top-of-the-line car/kayak/audio equipment, etc. She has the money to do that but can’t afford LTC premiums. Where’s the disconnect?
Here’s another common scenario: I get incoming calls with Caller ID stating: “METHODIST HOSP RE-HAB”. The caller is the daughter or son of someone who’s just broken their hip or suffered a stroke. They ask me to come sell their parent LTCi. I have the unpleasant task of trying to tactfully explain that their parent is uninsurable. Sometimes the child is incensed by this news. I suggest the child is of ideal age to find reasonably priced LTCi for themselves; this might be a wise idea if they want to assure a similar scenario doesn’t play out when at the end of their lives. The child is normally not interested. The reason is that the family is in the worst kind of turmoil, duress, and dysfunction. They are scurrying around trying to cobble together LTC for their parent, and there isn’t sufficient, readily accessible money to pay for it. This is the scenario Dayna and I urge you to avoid by doing reasonable, responsible LTC planning, now.
What all of my LTCi clients have in common, regardless of their incomes, is the ability to honestly, openly discuss LTC in advance. Most of my clients have had firsthand experiences similar to Dayna’s. They’ve learned from them, and taken action to avoid the consequences of not being prepared for their own long-term care.
If you need to investigate whether LTC insurance is appropriate for you – or not, give www.TheLongTermCareGuy.com a call at (920) 884-3030 and lets see.
Do You Have A Gap In Your Plan?
Hopefully you have planned and saved to have an income you can live on in retirement. You planned to use Medicare and either a traditional supplement or a Medicare replacement plan (advantage) to cover health care costs. Hopefully your other available income can be used for basic living expenses, travel, and some fun.
Would an unexpected bill that comes each month in the amount of $2000 to $8000 a month be a problem for your plan? For many people, it would. While only 70% of us will need Long-Term Care in our homes or a facility (HHS), less than 15% have sufficiently planned for this.
Does that mean all is lost when care is needed? Not necessarily. There are strategies that can help most anyone deal with the costs of Long-Term Care (LTC).
The least expensive way to deal with this is to purchase LTC insurance while you are still healthy, but this topic is addressing gaps, so let’s assume you did not do that. The government has two programs which can help, Medicare and Medicaid.
We all get Medicare at age 65, whether we retired early or are holding off until later. Medicare is health insurance which, while it does not pay for LTC, will pay for a short recovery stay in a nursing home. Medicare has learned that is it less expensive to have you recover from surgery in a nursing home bed than a hospital bed.
Assuming you are in the hospital as an inpatient for 3 days (two midnights), transfer to a skilled nursing home for recovery purposes, and do some type of recovery care rehab 5 days per week, Medicare can pay for that care for up to 100 days AS LONG AS YOU MAKE PROGRESS EVERY DAY. This typically does not go past 10-12 days.
Thus Medicare is not a useful payer of LTC services, but Medicaid is. Medicaid will pay for LTC once you can prove that you are completely impoverished (broke). Getting to broke is not pleasant. A single person spends down all assets to $2000 and cashes in life insurance, a married, at-home spouse can keep a house, car and some money which Medicaid will take back after death. Thus Medicaid will pay for care but you will have nothing left to pass on.
Medicaid also pays providers much less than you or I would pay by writing checks for our care, thus getting in to where you want care can be difficult.
Now, some solutions: There are ways to make your just a part of your money last as long as you do. A part of your net worth can be converted into life income – taking into account your [much] shorter than average life expectancy when you require care. If you can leave 2/3 of your estate intact to pass on, it’s generally a good thing.
You can also leave money for family through Medicaid allowed gifting. Irrevocable burial or burial spaces trusts can be funded for children and their spouses, moving a good chunk of assets to family and will not be counted as a divestment. Medicaid rules allow this in 49 states.
The important thing to remember is that there are solutions for most any situation that can at least help. If you would like to learn what you can do to protect some money for spouse or family, contact www.TheLongTermCareGuy.com to learn your options.
“Mind Your Own Business”
“Mind your own business”. How often we have said that to our children or other heirs. That statement does not help those trying to help you when you can no longer handle your affairs on your own.
It is very important that you make the caregivers, or power of attorney aware of what resources you might have.
Case in point: Friends recently lost their elderly mother. She went from sassy, sharp and capable to nursing home and finally to hospice in under 2 months. In this time the eldest son was caring for her and handling her finances, only to find out that mom had a Certificate of Deposit and a small annuity that she had not mentioned. This is now creating problems as he waits for access to these funds to pay the funeral home and other bills related to her care.
If mom had been forthcoming, the son could have been named as a Transfer on Death on the Certificate of Deposit, bypassing probate and making those funds immediately available upon presenting a death certificate. Or mom could have established a Revocable Trust naming the sons as beneficiaries of the estate, thus bypassing the problems and the wait for funds they are facing now.
The annuity has been annuitized, so mom has been getting payments, with a remainder to heirs after her death. It is very possible that mom could have accessed the funds from the annuity in a different manner, and not annuitized it. This may have made it easier for the son to have access to it to now. As it stands, the family will have to wait about a year, receiving small payments, instead of receiving the remainder in a lump sum.
Nobody could have predicted how this would turn out, who needs access to funds, and how. However, by letting the people who will have to take over know where the money is, and how it can be accessed can make things much easier for them. When the probate court does not allow immediate access to funds, family will have to dig into their own pockets, hoping to be reimbursed later.
One more piece that was missing in this non-existent long term care planning: Mom did not put aside any money for a Funeral Trust. This is important as her funeral could have been paid for and the sons would not be in the position of having to jump through hoops and coming up with funds out of their pockets. An irrevocable burial trust pays about the same interest as a CD at your bank, but is immediately accessible to pay the funeral bill completely – even before the death certificate has been produced.
60% of Adults Worry About Paying For Long-Term Care
A recent study claims that 60% of adults worry about how they will pay for Long-Term Care (LTC), and 10% said it was their top concern. While two-thirds of consumers agree that most people need LTC insurance, only 16% own any.
Most people have never investigated LTC insurance and simply “think” it is too expensive. Many insurance agents who dabble in this product feed that myth by suggesting policies that are way too large for the consumer’s needs.
When someone needs LTC services, their lifestyle changes drastically. There may not be as many vehicles in the household when someone can no longer drive. There will be less cruises, trips to Branson, MO, golf, boating, camping, excursions, etc. when these things become difficult. There may even be less dining out.
Thus much of the money that was spent on fun things and travel can be redirected to help pay for needed LTC services. Savings can also help, but not by spending the savings, but rather by using the interest those savings generate to also help pay for services needed. Thus, only the shortfall needs to come from some other source, like LTC insurance.
It is also necessary to consider where you will be living, geographically. LTC costs vary significantly across our nation and this must be taken into consideration. We find that most people are pleasantly surprised that after investigating such insurance with an expert who understands how and where LTC services are delivered, and can choose among many carriers for the best fit based on your age and health, that the coverage is nowhere near as expensive as previously feared.
Let me give you an example: Lets take a 65 year old person who is only now investigating LTC insurance. Assuming decent health (typically blood pressure and cholesterol medications have no effect on pricing) a 65 year old could purchase over $850,000 of coverage for less than $2000 per year premium.
It matters not if this is a male of female, as not all companies charge females 50% to 75% more than males. The coverage suggested here is a 10 year benefit of $70/day, with a 90 day deductible and includes an automatic, built in 5% compound inflation factor on the $70/day benefit that will double that benefit every 15 years. The entire benefit is paid out for each day care is needed, even if in excess of the cost of services. The benefit is good in any setting, home or facility.
$70 per day, plus a Social Security check will often be sufficient to cover care in your own home, adult day care, or care in an assisted living facility. Many people do not choose to purchase a policy large enough to cover the more expensive nursing home, since less and less care is done there anymore.
If the 65 year old pays that premium for 20 years, they will have paid less than $40,000 in income tax deductible premiums. If they need care at age 85, they can collect at a starting rate of $185/day. Over 10 years of collecting they will receive $852,000 in benefits to use in paying for LTC.
Note that the benefit increases by 5% compounded while collecting to keep up with the increasing costs of care. This option is vital and is included in this example.
Less than $40,000 in tax deductible premiums to get over $850,000 tax free later to pay for LTC – is that as expensive as you thought?
If you are going to investigate this, investigate with an expert in LTC financing. At TheLongTermCareGuy.com, we have been doing nothing but the financing of LTC for 23 years now. Give us a call at (920) 884-3030 or (800) 219-9203 and lets discuss your situation.