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Seniors Quarterly Newsletter
Real Estate Matters
Silver Edition. News & Issues for the Mature Market
Long-term
Care Insurance Provides More Time in Your Home Financial
planners have been sounding the alarm that Americans aren’t saving enough
money and that a lack of funds eventually may tarnish the golden years for many
people. A recent
Wall Street Journal Online/Harris Interactive Personal Finance Poll bears out
financial planners’ findings. It found that 56% of adults aged 45 to 54 and
39% of adults aged 55 and over don’t think they’ll have enough money to
finance their potential long-term care needs as they age. Nonetheless, only nine
percent have purchased long-term care insurance (LTC insurance), an insurance
product that provides care when you have an illness or disability for which you
need care for an extended period. Celia
Mason, a San Ramon, Calif.-based independent insurance and financial services
consultant, says denial frequently drives people’s procrastination. Many
don’t believe they’ll have to face the physical challenges of aging. “But
it’s inevitable because we’re living longer,” she comments.” Moreover,
people don’t realize how costly nursing care is. According to the 2005
MetLife Market Survey of Assisted Living Costs, assisted living costs in the
study was
conducted for the MetLife Mature Market Institute® by LifePlans,
Inc. Some
people think they’ll pay for services as they go or rely on spouses and family
for care as they age. But
paying costs out-of-pocket can erode a couple’s financial security and leave a
surviving spouse in dire financial straits. Moreover, it’s important to be
realistic about the rigors of home
care. “I
don’t know too many women who can lift a man off a bed or floor,” Mason
comments. Expansive
benefits One great
misconception about long-term care insurance is that it only covers nursing home
care. Not true. A comprehensive policy provides care in various settings,
including skilled nursing facilities, assisted-living facilities, adult daycare
centers and in clients’ homes. To
accommodate home-based care, LTC policies cover more than just medical services.
For instance, such insurance can provide for assistance with dressing, bathing
and feeding and policies can also cover things like transportation, modifying a
house to make it safer or more accessible, and paying someone to run errands. Coverage
is based on a doctor’s plan of care for patients, according to Mason. “A
doctor’s plan could indicate a client needs help with bathing and dressing, as
well as meal service, house cleaning and even snow removal. LTC insurance could
provide for those things,” she comments. Buy the
best When
buying a policy, it’s important to understand exactly what you’ll get.
“The amount you receive depends on what you buy at the front end,” explains
Mason. “Buy as much as you can afford now. Later, you can reduce benefits, but
if you want to raise benefits, you’ll have to go through the application and
underwriting process from scratch. You’ll be older and it’s likely that the
rates will be higher,” she adds. There are
several important considerations. One is the waiting period before you can draw
on benefits. The elimination or deductible periods are the number of days
you’re in a nursing home or the number of care visits you receive at home
before a policy’s benefits kick in. During the elimination period, you’d be
responsible for paying for your care. The shorter the elimination period is, the more
expensive the policy tends to be. Another
consideration is the daily dollar value of care and whether inflation is
factored in. That is, a $200 daily benefit sounds like it would provide a lot of
care, but how much care will that dollar amount provide 25 years from now? Be
sure the policy factors in inflation. One more
matter to contemplate is years of coverage. That is, will the policy care for
you for three years, 10 years, or for your lifetime? The point is critical
because people are living longer. Just consider Ronald Reagan, who required more
than a decade of care for his Alzheimer’s disease. Get an
early start The younger and healthier you are, the more likely you are to
get the best rate when purchasing LTC insurance. Premiums rise as you age, and
Mason says it’s never too early to buy LTC insurance. “Don’t buy a policy
when ‘the house is on fire.’ Buy it when you’re a younger, healthier
Senior because there’s not automatic acceptance and people with certain
conditions won’t be insurable,” she comments. In
fact, more than half (57.2 %) of people who apply for LTC insurance after their
80th birthday are declined coverage, according to a national study reported in
the January/February edition of Long-Term Care Insurance Sales Strategies magazine. If you
have a family history of debilitating diseases, the urgency is great. “If you
have a grandparent with Alzheimer’s, buy LTC insurance right away,” advises
Mason. LTC
Insurance Tips 1. Buy a
policy while you’re a younger Senior both to keep costs lower and to increase
your chances of qualifying for LTC insurance. 2. Buy the
best policy you can afford. 3. If
still working and your employer offers LTC insurance, sign up. Often it’s
easier to get LTC insurance when multiple employees
are enrolling in a group plan. Sometimes individuals can be guaranteed coverage
without providing a medical history. 4. Be
honest about medical conditions. Insurers can deny coverage if you’ve lied
about your medical history. 5.
Understand what you’re buying and what you’ll receive for your dollars
before buying any kind of insurance. Additional
information:
________________________________________________________________________________ Real
Estate Matters: News & Issues for the Mature Market
Karla Cino, Realtors Karla
Cino, SRES |
