Now is the time to talk about Long-Term Care Insurance
Write down three words along the left margin of a piece of paper. You will want to remember these words, as they are the collective key to unlocking a financial debacle that is imprisoning our nation. Simple, easy to remember, yet seemingly impossible for some to internalize:
- Risk
- Cost
- Solution
Risk
The risk to which I am referring affects 60% sixty percent of all Americans, according to the Social Security Administration. The risk is that you will not be able to complete two of these next six Activities of Daily Living (ADL). You should write these down, too.
1. Dressing
2. Eating
3. Bathing
4. Transferring (moving from one place to another; getting up from a chair)
5. Continence (holding it in or needing a diaper)
6. Toileting (wiping your own bottom)
There is a risk that 60% of Americans will one day be unable to do 2 of those six activities.
Cost
Each American, because of his or her inability to perform at least 2 of the six aforementioned ADLs faces an average cost of $60,000 per year, according to MetLife, a leading Long-Term Care insurance provider. For an average of 4.8 years, each of us rely on someone else’s care that results in enormous costs to our savings plans, our children’s income and, most often, to our government.
Who wants to do the math? 4.8 years x $60,000/year = $288,000
Ladies and Gentlemen, the need for Long Term Care is the number one reason people are wiped out of all their income, investments and real estate. And they don’t usually even pay it all themselves. Churches, family members and (over half the time) our government picks up the bill for poor planning. In fact, within just 20 years, according to the Congressional Budget Office, four budget expenditures will cover today’s entire national budget of almost $3 trillion!
#4 — Interest payments for our national debt
#3 — Social Security
#2 — Medicaid
#1 – Medicare
What’s even scarier is that Medicare will often not pay a dime for medical expenses until you have exhausted all but $2,000 in assets (and you can’t easily give them away with out penalty). We have to change things so the cost of our future is not too expensive.
Solution
There is a solution. Of course it is not cheap, but what is, especially when it comes to protecting our future? Long Term Care Insurance (LTCI) can provide protection against having to move out of your home, bankrupting your children and even becoming a drain on society.
- If you are over the age of 40, you need to be having this conversation.
- If you are over the age of 50 and you don’t already have LTCI, you need to hurry!
- If you are over the age of 60 and you don’t already have LTCI, it may be too late.
Not everyone goes to a nursing home, many don’t want to. There are options of assisted living so that you don’t have to leave your home. Other LTCI plans include family help and reimbursement options. Most LTCI companies now offer same-sex partner benefit discounts, just as married couples receive.
We now know the risks that 60% of America needs Long Term Care.
We also know the monetary costs of America needing Long Term Care.
The emotional costs are significant, too. Because of the effects of aging, need for care and dependency on others, depression, alcoholism and even suicide could all appear to some as worthy alternatives. Basically, if ever in your lifetime you need help to physically “do stuff” for extended periods of time, you will need some form of LTCI.
Am I trying to scare you into thinking you need this?
You bet I am! It is time to start taking care of ourselves so that we aren’t the burden on our families and society that we seem to be headed for.
20 minutes with your financial advisor could save you 20 years of worry.
This is a very good article and it’s important for every person to prepare for the need for Long Term Care.
However, please note that you talk about spending down assets and refer to Medicare. I think it’s Medicaid you are referring to. Medicare does not pay for Long Term Care benefits.
It’s never too late to investigate the viability of LTC coveage. People are living well into their 90’s so 60 year olds should still be looking at LTC planning.
As an active member of HRC Federal Club, I can tell you that most of the population prefers to ignore this issue in long term financial planning. Chronic disability is not just an old age problem. Diabetes, MDA, Cancer,Parkinsons, HIV, Heart, and Blood Pressure problems are all issues that used to be death sentences but due to medical science, are now chronic health issues. Many of us will live longer than expected and to continue to enjoy our lives, we will need some help. There are excellent tools to fund that liquidity need with a tax free benefit. I hope people are moved by your article to learn more about planning for this financial need.
Jerry Levy
LTCFP Houston,TX
281-499-8992
To your knowledge, is it possible to buy Long Term Care insurance (without completely breaking the bank) if you are HIV positive? These days, there are plenty of people like me — 26 years positive, great health, and I expect to die of old age in another 40 years (I’m 44.) But I’ve been assuming for years that this type of coverage would be unavailable to me, and have tried to plan accordingly. But I’d love to be proven wrong.
At 44 typical coverage is very affordable. The key is your employment. In the past, some group insurance did not ask about HIV. Recently new group policies have included HIV as well as AIDs in their knock out questions. Check with your benefits person.