Planning For Long Term Care
What would you do if an illness or injury left you unable to
care for yourself? The chances of that happening might be greater
than you think.
The U.S. Department of Health and Human Services indicates that
people 65 and over face at least a 40 percent risk of entering a
nursing home, while the U.S. Government Accountability Office
estimates that 40 percent of the 13 million people receiving
long-term care services are between 18 and 64.
Despite the risk, a 2005 Kaiser Family Foundation survey shows
that only two in ten (21%) adults say they have long-term care
insurance. While cost is a common deterrent, LIMRA International, a
market research organization, says that people who have never
shopped for policies overestimate the cost by as much as five to 10
"Premiums vary due to age, health and policy type, but most
middle-income consumers can benefit from a long-term care policy,"
said Scott Perry, executive vice president and chief operating
officer of Bankers Life and Casualty Company, the 127-year-old
insurer that specializes in the mature market. "Like other
insurance, the younger and healthier you are when you buy, the less
expensive the premiums."
Planning for long-term care is encouraged while in your early
50s. As you research, remember to:
Determine long-term care costs.
The long-term care tools found at The Federal Long-Term Care
Insurance Program's site (http://www.ltcfeds.com/index.html) can help you
determine costs in your area.
Read about long-term care coverage.
Consult resources such as the Guide to Long-Term Care Insurance,
published by America's Health Insurance Plans (AHIP). Download the
brochure at www.ahip.org.
Explore what's available.
Compare several insurers' policies. Choose a well-established
company with solid financials. Long-term care can be challenging
and emotional, so you might want help from agents experienced in
serving the mature market.
Determine what you can afford.
According to the Life and Health Insurance Foundation for
Education (LIFE), a good rule of thumb is to spend no more than 7
percent of your gross income on long-term care premiums. Consider
spousal discounts and how different elimination periods, daily
benefits, and maximum benefits affect premium cost.
Involve your children.
A 2004 survey sponsored by Bankers Life and Casualty Company found
that adult children overestimate their parents' planning, while
older adults think they have the proper policies but are confused
as to what they actually cover. Sixty percent of seniors mistakenly
believe Medicare will cover long-term care costs. These disconnects
can put unexpected financial burdens on both generations.
Nursing home help, frequently-used long-term care terms and
helpful senior resources can be found at www.Bankers.com
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