All too often the need for Long-Term Care Insurance (LTCi ) is overlooked.
With so many distractions in life it’s not usually on our radar.
While it can take decades to accumulate the assets you’ll need to retire comfortably, just a few years of paying for long-term care may threaten a lifetime of savings.
Including LTCi early in your Financial Planning will give you the opportunity to plan and decide on the LTC setting of your choosing - home, assisted living or a nursing home.
It might be difficult to envision one day needing hands-on assistance with some basic activities we do everyday, like:
bathing
getting dressed
walking
taking daily medicine
cooking
eating a meal
cleaning our home
doing small errands & food shopping
paying monthly bills
But the likelihood of increased frailty and the need for long-term care just increases with age.
Have you thought about what would happen if you needed help with some of your daily activities in life, for several months or for many years?
A LTCi Policy provides for personal care for an extended period of time. It involves providing you with hands on assistance, when you find you are having difficulties with at least two Activities of Daily Living (ADLs): bathing, dressing, eating, transferring, toileting and continence.
The U.S. Department of Health & Human Services in 2008 reported that 70% of people who reach age 65 will be in need of some form of long-term care-oriented services at some point in their lives.
LTCi helps insure you can continue to do the little things in life that you once took for granted. With some assistance you'll find you can still do many of the daily activities you've enjoyed.
What makes LTCi different from other health-related coverage is that it targets your Activities of Daily Living (ADL) as opposed to medical cure-related activities.
You’ll have the support of a Care Coordinator, a licensed health care professional who will:
assess your needs of ADL
develop an individualized plan of care
help you arrange for your long-term care services
You won’t be taking this journey of finding and coordinating your daily LTC services by yourself when you purchase a LTCi Policy.
Care giving can place a significant emotional and physical burden on a spouse, family members and friends that you can avoid through the benefits and services that your LTCi Policy will provide. You’ll be giving your family and close friends a gift of support, letting them be assured you will get the type of care you designed.
So what is the best age
to apply for LTC Insurance?
Preferably when you are younger and healthier, ranging from ages 45 - 55. Starting a plan at those ages will help qualify you for the lowest costing premium payments to pay for your LTCi.
But life, many times, gets in the way and we find ourselves tapped out to even consider a LTCi policy.
That’s when the next best ages to purchase LTCi are from ages 55 - 65. At that later time you might find yourself with less financial obligations:
the kids have graduated from college
you’ve paid off the mortgage
the car loan is paid off
your Term Life Insurance Policy expired around the time your kids graduated from college
Now it makes financial sense for you to carry the costs of a LTCi plan.
Premiums will then be based on you being a little older and with some minor health issues. They may be a little higher than if you had applied a few years earlier.
If you are older than 65 you may qualify for LTCi, but I might recommend us looking into other Insurance products. For instance, a Fixed Income Annuity could be designed to help you pay for a portion of your LTC planning. The cash flow from the Annuity would be fixed and guaranteed; you determine how many years you would want to receive the cash flow.
And couples will find, with stand alone LTCi Policies, they may benefit from large discounts if they apply for their LTCi Policies together. When including LTCi in their retirement planning I would recommend compounding that possible discount by applying for LTCi when they are younger and healthier, thus qualifying for even lower costing premiums.
Couples contemplating divorce and sorting out their finances will find that, until their divorce is finalized, the couple’s discount may still be possible.
LTCi has evolved to include more product options. There’s the traditional stand-alone policy and the hybrid polices (combining Life Insurance with a LTCi Rider). If you do have a real need for Life Insurance, a hybrid product may not be the best solution, since a Long-Term Care claim will eat away at the death benefit of the Life Insurance Policy.
It’s difficult to envision one day needing some assistance with life’s daily activities.
LTCi programs have evolved giving you more products to choose from.
Taking the time to more fully plan your future, will help you on many levels:
creating secure and separate assets to pay for LTC needs
having the support of a Care Coordinator to help arrange for LTC needs
lifting the emotional burden from family and friends who are involved in your life
Here’s a list of a few more posts in which I’ve written about LTCi.
My post entitled: Let’s Get Better At Juggling Our Cash Flow!
I write about: Three Cash Flow Benefits That Insurance Products Can Provide.
Click on the link: Managing cash flow that supports our life styles
Another post entitled: Why Should I Look At Long Term Care Insurance; It’s Expensive.
I write about: Premium Rate stabilization laws being implemented in 2000 and in 2014 further updated to protect the consumer.
Click on the link: What is Premium Rate Stabilization?
Let’s Start the Conversation
about how LTCi can impact your life.
Debra K. Bedell
Insurance - a great Hedge against Risk.