Do you need LTC insurance?

According to the Health Care Insurance Association of America, people were asked what is the most important reason for having long-term insurance.  The top four reasons were:

  1. To protect their current standard of living.

  2. To guarantee the money needed to pay for quality care.

  3. To keep their independence and not have to depend on others

  4. To protect their assets accumulated over their lifetime.

Whether you should buy a LTC insurance policy will depend on your age, health qualifications, overall retirement goals, income, and assets.  LTC insurance is not for everyone.  If your only source of income is social security or Supplemental Security Income (SSI), you probably should not buy a LTC insurance policy.

If you have ample assets but do not want to use them to pay for LTC, you may want to buy a LTC insurance policy.  Many people who want to stay independent of Medicaid or family help purchase LTC insurance.  They want the option of making their own choices of where they want to receive help or what nursing home they want to go to.  LTC insurance gives them this option. 

If a person has to go on Medicaid they have already spent down to qualify for assistance.  When this happens your option of which nursing home to go to are limited.  Not all nursing homes accept Medicaid payments.  And if a nursing home does accept Medicaid, they may have limited rooms or beds in their facility that is Medicaid-approved.  This could mean that the only facility that will accept your Medicaid Assignment is a long distance from your old residence or from family or friends. It could possibly happen that you are in a nursing home as a private-pay patient.  If your money runs out and you have to go on Medicaid, the nursing home that you are presently in may not accept Medicare Assignment.   That means you may have to find a nursing home that accepts Medicaid. 

I some cases your children or family members want to help.  Many times your children are spread all over the country due to work requirements, marriage, etc.  They love you and want to make sure you are cared for.  They buy a LTC Insurance Policy for you.  They do this out of LOVE for you, because they know it would be difficult for them to provide any other care.

                                                                                               

The older we get

In the 1996 U.S. Bureau of Census report of 1991, life expectancy for women was 79 years and 72 for men. As a result, there is a statistically good chance that a wife will outlive her husband.  Once a person reaches 65 years old, it is expected they will live another 17 years.  Baby boom women are likely to be widowed later in life then today’s older women, and more may be divorced or never have married.  In 1994, approximately one in eight Americans were age 65 or older.  By 2030, one in five Americans will be senior citizens. With today’s modern medicine and the emphasis on health, the two fastest growing age groups are 85 and 100 year olds.

In a 1998 report by the American Council of Life Insurance, an individual with severe disability living at home may pay over $36,000 for the assistance of a home health aide.  Seventy-five percent of all nursing home residents are women.  Also on average, assisted living facilities charge $26,000 per year.  And the cost keeps going up every year.

 

In the January 1997 Business and Health article it mentioned over 70% of single individuals and 50% of couples with one partner in a nursing home are impoverished within a year.  A study done by AARP in 1996 stated that almost half of current nursing home residents who were admitted as private pay residents eventually spent down to Medicaid.