RSS
Home
Long Term Care Insurance
Print
Email
RSS
Subscribe
Do you need Long Term Care Insurance (LTCI)?.jpg)
Yes. Without a doubt and unequivocally. The U.S Department of Health and Human Services reports that once we reach the age of 65, there is a 40 per cent that we will spend time in a nursing home. AARP says that 10 per cent of those that enter will stay longer than five years. In North Carolina, the AARP study shows that a year of care in a Skilled Nursing Facility (SNF) will cost $63,510 per year. If we multiply 5 years times $63,510 we get a very large pile of money spent on a nursing home. LTCI can cover this worst-case scenario. Think of it the same way you would your home, car, or liability insurance: if something bad happens, the insurance company has your back.
But...will you run out and get Long Term Care Insurance?
Probably not.
There are police reports every day about North Carolina drivers without care insurance, but the rest of us plainly see the benefit of having Geico, State Farm, or Allstate holding us in their "good hands" and taking on the risk of monetary loss from our misfortune.
Likewise, we understand the need for insurance coverage for our home, knowing full well that if a fire destroys our home we will eventually have a new home to live in thanks to our policy. (And good policy design.)
So when we talk of LTCI why doesn't everyone have it? A person without a car does not need car insurance and person without a house does not need home insurance, but don't we all have physical bodies that will break down during the normal aging process? Won't we eventually need extensive care in our old age even if we are healthy?
No, say most potential clients. Talk of Long Term Care (LTC) involves dealing with their own morbidity and eventual mortality. It is not a fun subject so the discussion is turned off and we move to a different subject. Another group of potential clients is convinced that LTC is not in their future because one way or another they will die before they suffer the normal decline of the human mind and body. The concept of Alzheimer's, for example, makes these currently normal people turn and run.
And the cost for LTCI is astronomical, isn't it? What better reason to avoid thinking about it than to write it off as too expensive. We can't afford it. End of discussion.
Cost is an issue but if you are older and trying to get LTCI it is akin to being in your house with a wildfire approaching and calling your insurance agent to sell you home owner's insurance. Like everything else financial, the best time to get insurance is NOT when you need it but when you PLAN for it. The older we are the closer we are to that eventual decline described above, and the closer we are to using our newly purchased LTCI. That means we will be paying more for our coverage than someone NOT near that age when they might need to use the insurance. Simply put, the younger we are the less our LTCI will cost. LTCI for a person in their early fifties would be be about the cost of a latte a week, depending on where they buy their coffee and how we design their policy. And if you are older and want to get it, use every available resource to get the best price and policy.
Yes, there are clients who should not purchase LTCI and consulting a financial professional will help you decide if you are one of those. But for the rest of us LTCI needs to be considered in our Financial Plan. In fact, with proper planning and foresight there are ways to get LTC coverage without spending any money.
There goes one excuse. What about the others?
When discussing LTC with clients, I always trot out that simple refrain: Have a plan. To not have a plan and need LTC can be disastrous for our well-being as well as our bank account.
Check out the North Carolina SHIIP website (www.ncshiip.com) for more information, or write to me at ness23456@aol.com.
Related Articles:
Add a Comment
