Long Term Care Insurance, An article from Lauren Gershen’s Newsletter

Here Lauren’s interview at http://kindethics.com/2010/01/interview-with-long-term-care-insurance-expert-on-nov-27th-11am-pacific/?preview=true&preview_id=1478&preview_nonce=7efffc855d

In the years following World War II, there were many babies born which created what has come to be called the Baby Boom. Comprised of persons born between 1946 and 1964, “baby boomers” are one of the largest segments of our society.

With the oldest boomer quickly approaching retirement age, it’s time that boomers asked themselves some important questions: How are you preparing for retirement? Is it possible that you could outlive your retirement savings? Have you faced the possibility that you may need long term care at some point, either in your home, in assisted care, or in a nursing home?

Here are some facts to consider:
• 60% of Americans who reach age 65 are expected to need LTC services at some point, while 40% of those receiving LTC services now are ages 18 to 64, says OPM [Office of Personnel Management].
”A federal case for LTC”
Employee Benefit News, 02/01/03
• The national average cost of a year in a nursing home is $57,700.
Nursing Home Cost of Care Survey
Conducted by Evans Research, an independent research firm, 7/31/03
• Many of the Baby Boomers over age 55 mistakenly believe they are adequately covered for long-term care expenses through their workplace benefits packages. However, their health plans may only cover very limited long-term care expenses. As a result, many Boomers unknowingly face the risk of having their accumulated assets depleted by long-term health expenses that follow an unexpected event in their lives.
”Conning’s Industry Insight: Long Term Care Insurance.”
Issue #4, June 2002

Sobering facts, to be sure. And yet, many of us stubbornly cling to the belief that we will never need long term care. Above all, this shows how vital it is that we become better educated.

First, it’s important to understand what long term care is. Long term care provided under a tax qualified policy is defined by federal law as care for a person who requires assistance with at least two of six activities of daily living – bathing, continence, dressing, feeding, toileting, transferring – for a condition that is expected to last at least 90 days; or care for a person who has severe cognitive impairment, such as Alzheimer’s disease.

It’s important to recognize that includes many types of situations that can result in the need for long term care at any age, not just limited to senior citizens.

Next, it’s time to seriously examine some difficult questions.
Who will provide the long term care we may need? Many of us think our spouses or other loved ones will care for us, regardless of the level of care we need or the level of skill our families have in health care delivery. But, depending how events unfold, that may be impractical or even impossible.
Who will pay for the long term care we may need? Many people believe they can self-fund their long term care needs. But even the most effective savers should calculate how long their assets might last if drawn upon to pay the costs of long term care.
Others believe the government will pay for the long term care they may need. But today, Medicare will only pay some of the expenses for up to 100 days in a skilled nursing home if you qualify at all, and will only pay for certain types of skilled care in your own home. And what will happen to Medicare benefits when baby boomers begin turning 65 in 10 years is an open question.

Long term care insurance can help you provide for yourself.
It is critical that baby boomers understand that the cost of a long term care insurance policy today can be quite affordable, especially when compared to the cost of long term care. But each year the purchase is delayed, the higher the rates generally become.

Compare the cost of long term care insurance premiums paid over even 10 or 12 years to as little as one year in a nursing home, and you’ll see how valuable long term care insurance protection can be in terms of dollars and cents.

Finally, there’s the knowledge that, if you need long term care, with long term care insurance you will have choices about where you receive care, that you will have coverage to help pay for that care, and that the responsibility for providing care may not fall to your family. These choices can also help preserve your financial independence and your dignity, and those are priceless.

Lauren V. Gershen CLTC
Planning For Quality of Life
Long Term Care Planning & Insurance Specialist
LGershen@aol.com
(760) 777-9061 Office
(760) 777-9062 Fax