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5 Questions to Ask To Determine Pros and Cons of Long Term Care Insurance

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Is long term care insurance a wise purchase? You’ll need to evaluate the pros and cons of long term care insurance to come up with your own answer. Here are five questions to ask to help you determine the pros and cons of long term care insurance.

    1. Do you lead a healthy lifestyle? Believe it or not, healthy may mean you are more likely to need care. The healthiest people are often the ones that end up needing long term care assistance later in life, whereas heart problems or cancer may take the unhealthy ones sooner. One of the pros of long term care insurance for a healthy person is it can allow you to stay in your home and maintain your independence longer. This is because most policies issued today cover the cost of in-home care, which can provide someone to help with many of the activities of daily living.
    1. What does your family‘s health history look like?What is longevity and health like for your grandparents, parents, aunts, uncles and siblings? Has anyone needed care later in life? Who was there to assist them? What if they had needed care? How would it have affected the family? A pro of long term care insurance is that it reduces the burden of care that may other wise fall on loved ones.
    1. Are you willing to spend your own assets down and then become a dependent of the state, or dependent on your family, should you need care?What if you break a hip later in life? What if your mind remains fully alert, but you need help cooking, cleaning and dressing, and you do not want to move in with a family member? Who would help and how would you pay for their help? Full time long term care assistance can run $6,000 – $10,000 a month or even more if medical care is needed. If you have sufficient assets to cover this cost, then you have no need for long term care insurance.
    1. Can you afford a premium that would provide you a reasonable amount of coverage?Long term care insurance has features that you can adjust. Like buying a car, you can get all the extras, and pay for them, or you can buy a base model that costs less but still provides decent transportation. The major con of long term care insurance is the same as any insurance: you may pay premiums for years and never use the coverage. You need to look at it the same way you look at any other type of insurance. After paying for homeowner’s insurance for years, are you upset that your home never burned down and that you never used your insurance?
  1. What do the long term care statistics say about how many people will need care, and how long they will need it for? According to long term care statistics “the lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older.” It is good to look at the statistics, but your personal odds are either zero or 100%. You either will need care or you won’t.

Summary of Pros and Cons of Long Term Care Insurance

  • The pros of long term care insurance are that it allows you to maintain your independence and reduces the financial and psychological stress that a long term care need causes a family.
  • The cons are the cost of the premiums.

Whether you buy insurance or not, you’ll want to have a plan in place so you and your family know what to do if you need care. That plan involves talking to family and friends about their ability to help, if and when help is needed.

 

 

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‘Gravity’ and the Long-Term Care Crisis


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By: Chris Orestis

I recently went to see the movieGravity” starring Sandra Bullock and George Clooney.  It is a fast-paced, exciting thrill-ride from start to finish. After we left the movie, and I replayed the life-threatening events for the actors that unfolded on the screen, I could not help but begin drawing comparisons to the long-term care funding crisis currently unfolding in America today.

Start with the stars of the movie: Sandra Bullock and George Clooney are both baby boomers and they find themselves unprepared to deal with a sudden crisis that puts them in immediate jeopardy. Most seniors and baby boomers are also unprepared for what is too often a sudden health crisis through which they must safely navigate. In space, an unexpected collision with a satellite or other object is disastrous. For a family, an unexpected fall or rapid decline in health can also be disastrous. The astronauts in “Gravity” had to contend with limited oxygen and how they could conserve this precious resource long enough to find sanctuary. For families confronting the costs of long term care, money is like oxygen. It is a precious resource in limited supply that must be conserved. The biggest fear of the young is not living long enough, and the biggest fear of people in long-term care is living too long and outliving their “oxygen” supply.

Once disaster strikes in the movie, Sandra Bullock and George Clooney are literally tethered together and entirely dependent on each other for survival. Spouses and their family also experience a similar “tethering” effect where they become very reliant on one another to make it through a long-term care crisis. The feeling of being overwhelmed can be helped by sharing the burden, and focusing on the ultimate goal of making sure a loved one will be able to receive the best possible care.

In the movie, the astronauts are prepared for every contingency and have dedicated support systems in place to get them through each phase of their mission. Nonetheless, when disaster strikes things quickly spin out of control. In life, too few people have made plans for how to handle long-term care. A future long-term care patient may have close loved ones, but those family and friends may not be able to drop everything in devotion to a patient’s care. Families should put in time now to discuss the wishes of loved ones when it comes to long-term care, and understand the financial situation and available resources.  Are there savings and investments that can be accessed; is there a long-term care and/or life-insurance policy in place that can be converted to pay for care– and where is it; is there a final will or living will, and should a power-of-attorney document be in place?

In the movies, our heroes often work their way through challenges with a combination of luck and skill (and, of course, some movie magic) to find their way to a happy ending.

For families confronting the hard decisions and costs surrounding long-term care, however, they will not be able to count on a hero swinging in at the last minute to rescue them. But, a happy ending is possible for families that take the time now to prepare, seek out information and know how to work together to make sure their loved one will be able to achieve a safe landing.

About Chris Orestis: Chris Orestis, nationally known senior health-care advocate and expert is CEO of Life Care Funding (www.lifecarefunding.com), which created the model for converting life insurance policies into protected Long-Term Care Benefit funds. His company has been providing care benefits to policy holders since 2007. A former life insurance industry lobbyist with a background in long-term care issues, he created the model to provide an option for middle-class people who are not wealthy enough to pay for long-term care, and not poor enough to qualify for Medicaid.

 

 

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