I know, I know, no one likes to think about the fact that we may need to be cared for by others as we age.
The idea of losing our independence in our retirement age is a touchy and emotional subject.
The idea of asking our adult children or a nurse to feed us or help us to the bathroom brings up mental images that we'd rather not think about, doesn't it?
However, the reality is that at least 25% of us are going to be in this situation once we hit age 65 or older!
Therefore, it's time to start thinking about long term care insurance.
If you're thinking, "Medicare or Medicaid will take care of me", think again.
Medicare only covers short term care, not long term. You're looking at about three and a half months of help. Some conditions, like Alzheimer's disease, usually don't even qualify.
Medicaid? If you're planning to count on this one, be ready to spend your assets down to poverty level. In 2002, someone in California would have to liquidate all assets (except personal residence) down to $2000 to qualify. Now you're broke and receiving government benefits (anything our government provides is usually the lowest quality possible).
You really should be looking at getting yourself a quality long term care insurance policy. Especially if you don't want to become a burden to your loved ones at some point.
Some things to look at are:
- Benefit Period: This could range from a few years to lifetime benefits. Average nursing home stays are three years. But what if you have Alzheimer's disease? Now, we're talking about an average of eight years.
- Daily Benefit: This is how much you receive in benefits to pay for each day you're in need of care. Once you start investigating the costs for nursing homes, assisted care facilities and home healthcare providers (and the future costs, which is when you'll be needing it!), you're in for a rude awakening. You don't want to be paying for this out of your life savings. Trust me, I don't care how much you have saved, you'll be broke in a matter of months.
- Elimination Period: This is the amount of time you will pay for your care before the insurance company begins to pay your daily benefit amount.
These are only three of many details that you need to think about when buying a long term care policy. Others include things like premium waiver, inflation rider, guaranteed renewable option, inflation protection, deductible, etc.
I recommend you sit down with an insurance agent and begin setting this in place.
And, if you have parents entering retirement age, you want to discuss this with them. If they go through their savings because of an extended nursing home stay, guess who's assets are next in line to be affected?
Published by Matt Z. on October 27, 2007 09:02 PM
