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Paying for long-term care expenses
Your financial future
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I’ve got a subject that can have you reaching for the aspirin and antacid quickly. As if we don’t have enough concerns already, now we can worry about this risk and it can be very costly if not addressed. Of the five Covington Lassiter parents who have passed on, all of them incurred long-term care related expenses toward the end of their lives.

A lot of statistics can be quoted and they will probably put you to sleep, but here’s a couple to keep in mind:
– About 25% of people age 65 and over will need over one year of long term care or related expenses.
– The national average for one year of nursing home care now exceeds $75,000. Assisted living with care for Alzheimer’s and dementia is slightly over $50,000.

Funding for expenses of this sort probably isn’t on your “to do” list today, but let’s look at your options:

Medicaid — To qualify, Federal poverty guidelines for income and assets must be met. Your home and cars are not included in determining eligibility but states are required to recover assets from the estates of Medicaid recipients.
*If you can humanly avoid it, you don’t want Medicaid to be caring for you in your twilight years.
Family — Unless your spouse, child or grandchild has the necessary training, their good intentions probably won’t be the long term solution. There is no better example than me as I usually have to sit for a few minutes after a blood test.

Self Insure — Given medical costs, one year of long term care related expenses will probably exceed $100,000 and for a couple, $250,000 is quite possible in ten years.
If you have assets in this amount that are not needed for your retirement income, this might be a consideration. Most of us don’t however.

Transfer the Risk — Utilizing an insurance plan to cover part or most of this risk could be very beneficial to your pocketbook as you get older. Plans can be designed to cover any or all kinds of covered care.

One of the negatives in traditional long term care policies is the lack of guaranteed premiums. Claims have been much higher than anticipated and significant rate increases have resulted.
In recent years, companies have developed guaranteed premium life policies that may be utilized for long term care, chronic or critical illness and as an accelerated death benefit if the insured is terminal. Also, there are many annuities that will increase payouts if qualifications are met.
Discussions of these new products go well beyond this article, but if you have not addressed this risk in your planning, please give it serious thought.

Mike Lassiter is a Chartered Life Underwriter and Chartered Financial Consultant. He is a Licensed Insurance Counselor and a Registered Investment Advisor. He can be reached locally at 770-786-2781.