Good Tidbits to Know About LTC Insurance

Long-term care insurance is not my specialty, and while I might be able to sell it, I don’t.  I do recommend that clients integrate it into their financial plans when it makes sense (and it almost always does).  Some good tidbits for you:

1. LTC insurance is designed to protect your assets (your nest egg).  It can help cover the cost of care you receive at home from nurses’ aides, home health aides, and therapists, and can help cover the cost of assisted living facilities and nursing home expenses.
    
2. In CA in 2010, the median annual care cost for a private room in a nursing home was $87,000.  For a semi-private room, about $73,000.  The increase in cost outpaces the inflation rate.
    
3. At least 70% of people over age 65 will require some long-term care services at some point and 40% will need care in a nursing home.
    
4. Elderly women are most likely to utilize the service because they live longer, healthier lives.
    
5. Health insurance and Medicare cover almost none of the cost of nursing homes, assisted-living facilities or in-home care.
    
6. To qualify for Medicaid, people have to pay out of pocket until they are practically destitute (particularly if proper planning hasn’t happened ahead of time).
    
7. Better to obtain insurance when you’re younger and healthier and it’s cheaper.  Not to mention that you’re in a healthier state of mind (not in crisis) and can plan.
    
8. Long-term care insurance can be used to cover the care of someone with Alzheimer’s, an affliction that can last for many years and deplete a family financially.
    
9. LTC premiums can be paid with Heath Savings Account (HSA) monies.
    
10. If you’re self-employed, a portion of your premium may be deductible as health insurance.
     
11. Anyone can pay the premiums on the policy.  Children can pay for LTC insurance to protect against the family vacation home (or any other asset) being sold to meet long-term care costs.
     
12. Remember, your children might be picking your nursing home.  How many choices do you want them to have?

If you need a referral to a long-term care specialist, please let me know.  I can help you figure out whether LTC insurance makes sense in your overall plan.  A specialist can tell you what to look features to look for, what to consider when buying a policy, what riders are worth it, which company to choose, and how much to pay.

Identify your opportunities

I’ve talked to many entrepreneurs and self-employed types who are quite optimistic again about their ability to pay down debt they’ve created or invest in delayed business plans.  Many of us are starting to get the breathing room of an economy that might be back on the upswing.  Entrepreneurs tend to share this trait:  We’re optimists.  That’s a gift that gets us going in the morning, that spurs our creativity and our willingness to take risk and do new things, that keeps us going in hard times.  Its shadow side, though, is that sometimes we see things rosier than they are.

If you have put plans into place to pay off debt or “right the ship” in your financial life, stay the course, even if it looks like you’ll be out of the woods financially in just six months, or a year, or whatever you’re telling yourself.  Stick to your plan.  If you do happen to make tons of money, that’s great. But if you don’t, you’re back where you started or worse.  Great lessons are coming out of this Great Recession—financial prudence being one of them.  Take care of your financial well-being first.  If you have a chance to renegotiate a payment plan, do it.  If you have a chance to reduce your mortgage balance through negotiation, do it.  There are great opportunities here to put yourself on a better financial path for many years to come.  Entrepreneurs know how to find opportunity.  Make sure you’re finding yours, and put your long-term financial well-being on the top of that list.