Do I recommend that my clients purchase long-term care insurance? It’s a question that I am often asked.
My answer is always the same: I recommend that you look into it. If you feel you can afford it, then you should. But be warned: The premium on the insurance will go up over time in most cases, so you have to be committed to the product. Don’t buy it when you are 65, for instance, costing you $800 a year in premiums, then drop the coverage when you are 80 because it’s costing you $3,000 a year in premiums.
Long-term care insurance is a type of private insurance that will pay for the costs associated with long-term care. Long-term care is care in a nursing home, an assisted living residence, or at home, such as home health aide services.
A need for long-term care exists when a person cannot perform one or more of the basic activities of daily living. The basic activities of daily living are clothing, bathing, toileting, transfers from a bed to a chair or to a chair from a standing position, eating, and ambulating (walking). Commonly, a long-term care insurance policy will define a need for long-term care as existing when the insured cannot perform two or more of the basic activities of daily living.
Most people who need long-term care need that type of care when they are in their 80’s. For this reason, it is often difficult to purchase long-term care insurance by the time you are 80 or older. A good time to look into the insurance, in my opinion, is when you are around 60 years of age.
Long-term care insurance has never really taken off. Most people believe the premiums are too high and don’t want to pay for the insurance. I also believe that most people are overly optimistic about their future need (or lack of need) for long-term care services.
It’s nice to think that someday, we’ll just die peacefully in our sleep at the age of 100 after we have told our family that we love them and realized that we had a wonderful life. Reality is sometimes different.
I have served as guardian for over 100 people. I have served as special medical guardian for over 50 people. I have made end-of-life decisions for about 20 people. I have helped over 2,000 people qualify for Medicaid benefits. My mother is 91 and has resided in a nursing home for 3 years (despite the fact that when competent she would tell us to “just shoot me” if she ever needed to be placed in a nursing home; ironically, she’s quite happy) and my father is 88 and has required the assistance of a home health aide for the past 4 years.
I have a vast experience with long-term care needs and issues associated with aging. I have seen firsthand—many, many times—the needs people have for long-term care services. I have made long-term care decisions and end-of-life decisions for far more people than the average person will ever have to make.
I can say unequivocally that if you are lucky enough to attain the age of 80, there is a strong probability that you will require some long-term care services. For that reason, I recommend that my client’s look into long-term care insurance.
Nowadays, insurance companies offer greater options to insureds. Instead of paying a premium for insurance that is lost if the insured never requires long-term care, companies are offering riders to life insurance policies and annuities whereby the owner of the life insurance policy/annuity can receive long-term care insurance benefits in addition to the benefits of owning a life insurance policy or of owning an annuity. In this way, even if the insured never needs long-term care, his family will receive the benefits of the life insurance policy or the death benefit of the annuity.
Long-term care insurance is not the right solution for everyone, but the need for long-term care is far more common than many people realize. Understanding the available coverage options and evaluating them before a health crisis occurs can help families make more informed decisions about future care needs.