Many folks Baby Boomers had to look after our elders and have experienced the devastating monetary and emotional effects as they have been compelled to deplete a lifetime of savings and investing to pay for very costly (and obligatory) long-term care costs. Long-term care insurance is a subject that should be examined as you plan for your retirement.
Many folks would like to avoid this subject, but Central Government statistics indicate that virtually seventy % of us past the age of 65 will need some kind of long term care assistance. This is a tough fact! The shocking monthly price of long term care help does not make it any easier: Basic controlled living - $1,800 a month. Care home - $5,833 a month. And full"time home care - $12,960 each month (source: "Financing Long-term Care for the Elderly," a congressional budget office paper, April 2004).
Who should invest in long term care insurance? I would recommend that any person with assets (excluding their home) of a $100,000 or even more consider the benefits of a policy. This is generally best done with your financial advisor and his/her insurance consultant. I'd also endorse using info sources such as AARP to help decide if a long-term care policy would provide advantage to you in your special situation. Remember, this is not an one size fits everybody situation. There are numerous considerations like availability and amount of liquid and non-liquid assets, health factors (can you qualify?) and extraordinarily significantly, are you able to afford it? In most situations, it is best to investigate long-term care policies between the ages of 50 to 65.
Premiums will go up based on your present age and health history. Most of us develop health issues as we grow and many of these non-life threatening issues that won't disqualify us for a life insurance policy will disqualify us for a long-term care policy. Some of the main advantages of long-term care insurance are that you spend cash now to look after potential costs at a later date. The buck spent today will buy multiple bucks of coverage when the requirement turns up.
The amount of these leveraged dollars depends on various factors like your age, current health condition, and the policy features and riders. As an example, a healthy 65-year-old female who pre-pays a policy with a $100,000 one time premium payment would have up to $500,000 of coverage should the requirement appear (coverage will vary depending on companies and categorical policy features). Additional features on some policies are a death benefit or a return of premiums paid should the policy holder decide they no longer want the policy (various policy conditions may exist).
If you decide to investigate the advantages of a long-term care policy and you and your fiscal/insurance counsellors decide this is the best plan of action, there are still many choices to be attended to such as: what is the easiest way to pay for the policy (single premium, regular payments etc) and where should the money come from or what are the sources of funds? One of the techniques that is now being looked at by some seniors is utilizing some of the equity in their houses to purchase a long term care policy. As an example, if you're 62 years old or older, own your home and have satisfactory equity, a reverse mortgage may be a feasible alternative. In this example, money can be accessed from the reverse mortgage (cash that hasn't got to be repaid so long as the borrower lives in his/her home) that may enable the borrower to pay for his/her long-term care policy and not need to pull cash out of the existing household budget.
I would recommend a full inquiry of the pros and cons of reverse mortgages. Remember, everyone's situation is dissimilar and this might or might not be the best way for you. Another choice is to reposition existing financial assets. As an example, if you have a $100,000 Certificate of Deposit that is being held for emergencies such as a long term care need, you may use that CD to pre-pay a long term care policy. That $100,000 may purchase many times this amount in long-term care benefits. Again, these examples should be debated with your financial counsellor.
If you have satisfactory assets to guard, there are just two types of insurance. One, you self insure and you pay for everything until you spend down almost all of your liquid assets - then you may be suitable for Medical. 2, you purchase long-term care insurance. These are only some of the many. Eventualities and you should generally consult with your finance advisors before buying insurance or making long term financial choices.
Many folks would like to avoid this subject, but Central Government statistics indicate that virtually seventy % of us past the age of 65 will need some kind of long term care assistance. This is a tough fact! The shocking monthly price of long term care help does not make it any easier: Basic controlled living - $1,800 a month. Care home - $5,833 a month. And full"time home care - $12,960 each month (source: "Financing Long-term Care for the Elderly," a congressional budget office paper, April 2004).
Who should invest in long term care insurance? I would recommend that any person with assets (excluding their home) of a $100,000 or even more consider the benefits of a policy. This is generally best done with your financial advisor and his/her insurance consultant. I'd also endorse using info sources such as AARP to help decide if a long-term care policy would provide advantage to you in your special situation. Remember, this is not an one size fits everybody situation. There are numerous considerations like availability and amount of liquid and non-liquid assets, health factors (can you qualify?) and extraordinarily significantly, are you able to afford it? In most situations, it is best to investigate long-term care policies between the ages of 50 to 65.
Premiums will go up based on your present age and health history. Most of us develop health issues as we grow and many of these non-life threatening issues that won't disqualify us for a life insurance policy will disqualify us for a long-term care policy. Some of the main advantages of long-term care insurance are that you spend cash now to look after potential costs at a later date. The buck spent today will buy multiple bucks of coverage when the requirement turns up.
The amount of these leveraged dollars depends on various factors like your age, current health condition, and the policy features and riders. As an example, a healthy 65-year-old female who pre-pays a policy with a $100,000 one time premium payment would have up to $500,000 of coverage should the requirement appear (coverage will vary depending on companies and categorical policy features). Additional features on some policies are a death benefit or a return of premiums paid should the policy holder decide they no longer want the policy (various policy conditions may exist).
If you decide to investigate the advantages of a long-term care policy and you and your fiscal/insurance counsellors decide this is the best plan of action, there are still many choices to be attended to such as: what is the easiest way to pay for the policy (single premium, regular payments etc) and where should the money come from or what are the sources of funds? One of the techniques that is now being looked at by some seniors is utilizing some of the equity in their houses to purchase a long term care policy. As an example, if you're 62 years old or older, own your home and have satisfactory equity, a reverse mortgage may be a feasible alternative. In this example, money can be accessed from the reverse mortgage (cash that hasn't got to be repaid so long as the borrower lives in his/her home) that may enable the borrower to pay for his/her long-term care policy and not need to pull cash out of the existing household budget.
I would recommend a full inquiry of the pros and cons of reverse mortgages. Remember, everyone's situation is dissimilar and this might or might not be the best way for you. Another choice is to reposition existing financial assets. As an example, if you have a $100,000 Certificate of Deposit that is being held for emergencies such as a long term care need, you may use that CD to pre-pay a long term care policy. That $100,000 may purchase many times this amount in long-term care benefits. Again, these examples should be debated with your financial counsellor.
If you have satisfactory assets to guard, there are just two types of insurance. One, you self insure and you pay for everything until you spend down almost all of your liquid assets - then you may be suitable for Medical. 2, you purchase long-term care insurance. These are only some of the many. Eventualities and you should generally consult with your finance advisors before buying insurance or making long term financial choices.
About the Author:
Steve Goldmann is a finacial health consultant who avoids jack3d side effects by utilizing Neuro Linguistic Programming.