Long Term Care Insurance 2013 | Not Just For Seniors

by John Darer CLU ChFC CSSC RSP

Some recent statistics concerning long term care may surprise you if you are under age 65.  it's not just your parents' or grandparents' issue. It's yours.

• 40% of people who need long term care are working-age adults between 18 and 64.
• By 2025, for every 100 middle aged individuals, there will be 253 seniors.
• There is a 68% probability that an individual over age 65 will become cognitively impaired or unable to complete at least two activities of daily living-including dressing, bathing or eating over his or her lifetime.
• On the aggregate, of those who enter a nursing home, 50% will stay an average of 2.5 years; 10% will stay there five years or longer.   Source: Leimberg Elder Care Law Planning/ Carol G. Einhorn   January 14, 2013
  

Average Per Day

CT  Nursing Home Private Room  $400 

NYC  Nursing Home Private Room  $370

For those needing Nursing Home Care under age 65,  the  percentages

Stay over over 3 years   27.6%     Source: AALTCi

John Darer is a member of the American Association of Long Term Care Insurance (AALTCi) and the Society of Financial Service Professionals (SFSP) and can assist you in determining a long term care strategy. Call 203-325-8640 for more details.

Comments

[John Darer]

Thanks for your comments Joyce, and Nick. I agree there is no rule of thumb, but I would encourage and early start. It is important to address the issue and ask "are the consequences acceptable?"

One thing I think it important to add Joyce is that there is a cost of waiting and of course an increasing possibility that the cost to cover the exposure and availability (due to medical history) might be beyond a person's reach at the later date. If you save for retirement and ignore current planning for the contingency of extended care it could wreak havoc on a person's financial objectives. I've seen personal injury claims where the negligent party only has a $50,000 policy from which to compensate the lawyer and the catastrophically injured party. It was one factor to motivate me to acquire the coverage at age 38. Someone I know in her 30s had to take more 6 months off work to be a caregiver because there was no coverage and the cost of services was not affordable.

[Joyce]

None of us knows when we're going to need care. Some people will never need care. Others won't need care until their 80's or 90's. But, many will need care in their 60's and even their 50's and 40's, (e.g. Christopher Reeves and Michael J. Fox.) How then can we come up with a "rule of thumb" for determining the best time to purchase a long term care insurance policy?

Since long term care insurance is nothing more than income and asset protection, we should use a "financial model", not an "age or health" model for determining the best time to purchase long term care insurance.

I think the time to purchase a long term care policy is when you can comfortably afford the premium without sacrificing contributions to your retirement accounts.

[Nicholas Jackson]

Great advice. I've been thinking about this for a while as I need to secure some type of insurance on myself and family long term.

People don't look ahead. A good example of this is an uncle of mine that didn't keep proper insurance on himself, NONE... other than when covered under his wife's work plan. He sold his final business business in his mid 50s and retired happily, starting a small farm as a past time. Shortly before retiring he had a new home built. In fact I did half the work. My father was a carpenter and lumber jack and mother a photographer and entrepreneurial type (an odd but perfect combination). He seemed happier than ever.

Then he started growing ill. He's 6'4 with shoulders as wide as the desk I sit at, weighting in at nearly 400 pounds he managed to carry well at that time. Then his health went into the gutter, he had several operations and the 3-5 million he had tucked away, aside from other property and things he'd kept from past ventures like his farm, etc.

He's virtually bankrupt now and can barely afford his medications. It's strange to see a man that made money at everything he touched without lifting a finger fall that fast that hard and have to sell things they love.