Long Term Care

I am at the age when various body parts either start falling off or seizing up and I'm penciling doctor appointments into my day-planner with greater regularity. Already I'm on a first name basis with my local pharmacist. The valet at Henry Ford Hospital downtown knows my truck on sight and Marie at the main floor hospital cafeteria waves hello whenever I pass by on the way to my eye appointment. Slowly but surely I'm on a one way highway to old age where eventually I'll need skilled and not so skilled care to patch and spackle me until I head out to that big brokerage firm in the sky.

Back in the day when an elderly family member got sick everyone got together and made the decision on who was going to take care of granny or gramps and who was going to be snookered out of their bedroom while care was being given. At worst a hospital bed was wheeled into the living room and the oldster became almost part of the furniture as life revolved around him or her. Today no one has the time for that and the family member either goes into an extended care, nursing home or has home health care come to them. The cost is monstrous and an easily it can amount to two to three hundred dollars a day which quickly adds up when caring for someone. Most of that is not paid by Medicare, group health or private supplemental insurance.

It's not cheap living a long time while being old and sick. It is as expensive as anything anyone will ever spend money on; just ask someone who has had a relative in an extended care residence or needed home health care. Small fortunes disappear and a lifetime savings legacy is quickly wiped out. A cost of $50,000 a year is not unusual to take care of someone. In answer to that today's insurance companies created long-term care insurance but you can only buy it when you don't need it. When you need it you can't get it. Lots of people just don't like that at all. They want to be able to get it when they can't get it.

Long-term care insurance is also expensive, not as expensive as paying dollar for dollar the cost of care but not a cheap premium. It is insurance for living too long and giving people a certain dignity in their last years. But, what happens, people ask themselves, if a person doesn't slowly fade away like a good soldier but is hit by a bus and they've been paying into a long-term care policy? The argument shifts to not buying long-term care and convince ourselves that we'll die suddenly and not over a long period of time. Unfortunately the actual numbers differ. The average person lives now well into their 70s. Most people do not die violent or sudden deaths but slowly. The cost for caring for the elderly is extremely expensive.

Insurance companies are not stupid and realize the reluctance of people buying long term care insurance for their own good tomorrow is based on spending premium dollars today, and for many years, on something they may never use. 'What would you like, dear, a long term care policy or a new kitchen?' One of the really good thing to come out of this parsimonious attitude are new policies.

There are three basic ways insurance companies today provide benefits and do it economically. First is the long-term care contract with a return of premium rider. If the beneficiary does not use the benefits the premiums are returned. All money spent on the long term care policy are returned to the family.

Life insurance companies are adding moderate long-term care living riders onto life insurance policies to provide living benefits and dollars used for that care would be subtracted from future death benefits.

Savers are also able to get long term care riders. Fixed annuities from a few companies now offer a long term care rider that offers living care benefits after a waiting period is satisfied. This is attractive to seniors as they can save, earn a guaranteed rate, have access to their fixed savings and still have a moderate long-term care policy without additional out of pocket costs.

A few tips when shopping for that long-term policy. It is important that you understand that the policy you choose is the one you'll own forever, Make sure that the one benefit you add onto the long-term care policy is an inflation rider, especially if you are less than 60 years of age. The rider increases daily benefits as inflationary trends increases costs of in home and resident care.

Rates on premiums are never guaranteed and while the cheapest policy is often the most attractive understand that the premium will go up from the so-called teaser rate. Finally, when buying a policy check out the claims paying ability of the insurance company. You do not want to find out down the road that the company can't or won't pay the stated and agreed benefits because of their poor economic health.

If you need additional information on anything contained in this blog call Paul Stanley @ 877 783 7080 or write him at pstanley@westminsterfinancial.com