Who needs long term care insurance? According to a recent article in the New York Times baby-boomers.

Fran Hawthorne, writer and retirement planning specialist writes:

MOST of the nation’s 78 million baby boomers are watching their parents grow old. While investigating caretaking options for their parents, they should also be thinking about their own old age and planning how they will pay for nursing homes or home health aides for themselves, experts say. With life expectancy steadily rising, the odds are that they will eventually need some help with basic functions, like dressing or walking, maybe for decades.

But many boomers are ignoring this prospect.

Why are so many people disregarding the prospect of the financial consequences of long term health care costs?  Could it be that too many people are still suffering from the notion that someone is going to take care of them?  As most readers discover in “Insider Secrets” there is no safety net other than your own bank account.  And as couples age there is a hugh risk of that bank account (or retirement fund) being tapped out.  While you may never have a ltc need the odds of a spouse having one is quite large.

Boomer’s are watching their own parents age and seeing the costs of care but still not wanting to look into the crystal ball.  Perhaps it’s just human nature to say “it won’t happen to me”.  While that is well and good it might just happen to your spouse and through that long term sickness your bank balance could well be pinched into oblivion.

Who needs long term care insurance is like asking who needs health insurance.

While ltc insurance may or may not be for you what is for you is learning about how these policies work, what risks you face and how to minimize those risks is for everyone.

Technorati Tags: long term care, Long Term Care Insurance, Nursing home, who needs long term care insurance

It is estimated that over 40% of all Americans will spend at least some amount of time in a nursing home or other type of skilled living facility.

The average annual cost for a long term care facility in the United States is a little bit over $40,000 (with some areas of the county averaging as high as $60,000 per year).

Medicare and Medicaid combined will pay less than 5% of all long term care costs. Generally speaking only those who are fairly wealthy or have family that can take care of them (and don’t mind inconveniencing them in this way) do not need long term care health insurance.

Technorati Tags: long term care, Long Term Care Insurance

My parents are nearly 68 and not in great health. They are both overweight (my mother is morbidly obese) and are under lots of stress. They had money, but lost lots in the bond market. They’ve bought and sold 7 homes in the 8 years they’ve retired and are obviously miserable and just keep moving for something to do.

Now they are leaving their family again (heartbreaking again) and I feel they are both at a high risk for needing care not too far down the road. My mom can’t walk due to arthritis, they both have high BP, borderline diabetic, my dad had TIA attacks (like mini strokes). I think they’re overall unhappiness is their biggest health risk. My mom also drinks. (no Rockwell painting here).

Could they get LT care insurance and how much would it be? These people have broken my heart a million times, are selfish, don’t do anything with their wonderful grandkids and are huge pains in the a ss, but I love them and worry about them. My gram died in a state home-very bad.

I would assume that they would not be eligible for Long Term Care insurance (not sure where tou are located though). Long term care insurance is there for when when you can no longer do the activities of daily living or mental deterioration. Strokes cause mental deterioration and arthritis limits movement, so I would assume that might be cause for a declie of coverage.

That being said every company underwrites insurance different and has slightly different coverage, so the best bet would be to contact a liscensed insurance agent where you live and run that scenario past them.

Technorati Tags: long term care, Long Term Care Insurance, Long Term Health Care Insurance

Our employer is offering unum ltc insurance at a group rate. For a 47 year old, 4 yr coverage @ 4k, monthly premium is $20.30. When I chose the compounded option, monthly premium jumps to $59.10.
I called they company and they said it is compounded at 5% per year.
My other thought was to go with 8k coverage, no inflation for $44.00 per month.
Is there anyone out there who understands this stuff and would please give me any guidance?
Thank you!

Long-term care policies for seniors living in major metropolitan areas with high labor costs can expect to pay $167 per day for nursing home care. This translates into $61,000 per year. If a consumer purchases a policy that pays a fixed $100 per day, with an inflation rate of six percent per year, $100 per day will pay less than one-third of the daily cost in 12 years, and 14% of the cost in 24 years.

The math is easy. At six percent inflation the cost of nursing care will double every 12 years and the daily charge will become $354. In twenty-four years the same nursing charge will have grown to $708 daily. So a consumer who purchases today at age 56 a long-term care with a fixed benefit of $100 per day who requires nursing-home care at age 80 will have to pay more than 85% of the costs out of his or her own pocket.

The answer is to purchase compounded inflation protection that increases the benefit the policy will pay each year. Since health-care costs predictably will continue to inflate, the U.S. House Select Committee on Aging concluded that “without inflation protection, long-term care insurance policies are not a wise purchase.”

Five percent compounded inflation protection. Rather than increasing the daily benefit by five percent of the original benefit, this option increases the benefit by five percent compounded, meaning that each successive year’s benefits are increased by five percent over the previous year. The compounded option at 5% compounded per year will pay approximately $265 per day, after twenty years. This approach is the best option available, but given the historical, as well as anticipated, six percent inflation rate for long-term care costs, this plan does not keep pace with inflation.

Technorati Tags: Home care, Long Term Care Insurance, Unum LTC Insurance

I am 59 but diabetic. I think I run an above average chance of needing long-term care in the future. I do not want to exhaust all my savings and home to pay for nursing home care.

Inexpensive is a relative term. You should look into coverage as soon as possible. Underwriting guidelines have been tightening over the last 2 years and your diabetes might prove challenging. Get multiple quotes from a financial planner that specializes in LTCI and, of course, read “Insiders Secrets“.

Technorati Tags: Assisted living, long term care, Long Term Care Insurance, Nursing home

The Fed Will Not be Helping

Every 7 seconds another person turns fifty in the United States. Right now there are more people living on earth than in recorded history. In America the fastest growing segment of the population is over 80. History is being made as more people are becoming old and living longer than ever before. Hopefully, you will live long enough to become one of them. If you live that long, however, you will run the financial risks associated with aging. What risk? The risk of having an extended care need. In fact, many people have them now. Hospital care and modern medicine have gotten so good at managing chronic illnesses that more people live longer with impaired health.

Why am I telling you this?

I tell you this because you are in danger and don’t even know it. You are swimming in the financial deep end of the pool and don’t even know it. In reality, seven out of 10 couples will experience a long term care need in their lifetime and most of them will have to pay for care out of their own pockets. This is the first reason why you should educate yourself about long term health care insurance and the number one reason you don’t. The sad truth is you are most likely in denial.

There is no magic genie in a bottle that is going to rescue you. The hard, cold truth is you will be financing your aging expenses yourself. With outlays running as high as $70,000 a year in 2008 this is nothing to take lightly.

More denial and another reason to seriously look at long term care insurance and getting educated about your choices.

One day in the future long term health care insurance will be as typical as automotive or life insurance but for the here and now it’s an unusual idea. It is also an idea no one wants - after all who wants to imagine they’re ever going to need health care assistance. The denial of needing care is thick and lasting.

I bet right now, if I asked you “who do you know who has a long term care need” you could probably come up with a name or two. As for me I can name several. My father who was in a nursing home for 8 months; my Aunt who is in the last stages of Alzheimer’s, my other Aunt who has been diagnosed with Vascular Dementia or Parkinson’s (they aren’t quite sure). If I had asked each of them “will you have a long term care need in your lifetime?” they all would have said no. Another reason you don’t have long term care insurance - you deny this is ever going to be your story. The truth is you can’t predict the future.

Now you may never have a long term care need but in reality seven out of 10 couples do. My father did and my mother hasn’t. My Aunt’s have but my Uncle’s haven’t. This is denial reason number four. You take it for granted that everything is a-okay and will stay that way. The reality is that when a spouse gets sick the other has to start writing the checks and while one bottoms out physically the other bottoms out financially.

I can hear your thoughts – but the government will be helping me; they’ll pay for everything. Yeah, right. The government is slowly bankrupting itself as it is. With over 80 million baby boomer’s headed for retirement the social services are going to be strained on every level, state, federal, county. Furthermore Medicare does not pay for long term care. You have a limited number of days of Medicare coverage, lifetime caps and co-pays. If it does pay for long term care you have to be in need of skilled care. The truth is that Medicaid is the largest payor. What is Medicaid? It is medical welfare. How do you get it? You qualify through poverty. You spend your money until you qualify. Reason number five: you deny your risk of entering poverty in order to qualify for government help. Ouch!

Oh, I can hear your thoughts – but my kids will take care of me. Are you aware that as of 2008 the money and time lost to care giving is more than 80 billion dollars a year. By denying the risks and costs of aging you are throwing the weight of consequence on your children, their jobs and their lifestyle. This is not a solution this is denial and reason number six.

The last reason you don’t have long term health care insurance is because you don’t care enough about yourself. You owe it to yourself to plan for your life, lifestyle and financial future. Whether long term care insurance is the solution for you is unknown but what is known all of us are living longer and because of this you will face financial risks never before faced; financial risks that can literally wipe you out. Get educated today so you don’t become a statistic tomorrow.

P.S As an ex-agent and former long term care insurance specialist I invite you to learn what agents won’t tell you and companies hope you’ll never find out. Get the leaked chapters or read “Insider’s Secrets“.

Technorati Tags: long term care, Long Term Care Insurance, medicaid planning, Medicare

Hillary Clinton may be closing out her campaign - who knows really - but at least she speaks sense, or as I like to say “cents”.

In a talk directed to female voters Senator Clinton, her daughter Chelsea and her mother, Dorothy Rodham, discussed ideas for helping working families. Mrs. Clinton suggested an experiment between the federal and state governments to fund paid family leave, arguing that most people can’t afford to take the unpaid leave allowed under the federal Family and Medical Leave Act.

Her proposal calls for a $3,000 tax credit to an individual with substantial long-term care needs or their caregivers, a tax credit to cover 75 percent of long-term care insurance premiums and expansion of the Family and Medical Leave Act to cover employers with 25 or more workers. She also called for seven guaranteed sick days for full-time workers.

Her proposal is critical to families everywhere who are now facing and who will face the daunting task of caring for their family members.

For years there has been lobbying to make long term care insurance premiums tax deductible or at the very minimum provide some kind of tax incentive.

While I may be a voice in the wilderness I want to say “Thanks Hillary”. As a side-note and postscript I’ve yet to hear any of the male candidates talk about long term care. Could it be that since most of the caregivers are women that men don’t fully appreciate the consequences?

Technorati Tags: long term care, Long Term Care Insurance, paid family leave, Senator Clinton, tax credit

Long term care is a big issue. The U.S. government (in particular) doesn’t want to talk about this but the truth is more money is going out than coming in. Interestingly enough, however, there is a Federal Long Term Care Insurance Plan. What are they seeing that you and I are missing. The never ending horizon of baby boomers headed “over the hill”.

People need to plan for their own security. Just a few years ago Congress passed tougher laws on hiding assets making it harder for people to qualify for Medicaid (which is medical welfare).

Long term care insurance can be the best investment you make in “insuring” your retirement income and lifestyle but if you do it wrong then it could be your biggest financial disaster.

That’s why I wrote Insider Secrets to Long Term Care Insurance; the Ultimate Consumer Buying Guide.

Over the next coming weeks and months I’ll be exposing interesting information on the insurance industry and help you learn the “insider secrets” that keep you from getting ripped off.

Until then,…

Technorati Tags: Consumer Guide, Long Term Care Insurance, Medicaid, Medicare, Retirement Planning