| What is Long-Term Care? When people | | | | purchase long-term care insurance |
| consider the subject of long-term care, | | | | through the new Federal Long-Term Care |
| they often think about nursing homes. In | | | | Insurance program. The result is that |
| fact, long-term care has little to do | | | | consumers are forced to pay privately |
| with nursing homes. Understanding the | | | | for their care. |
| difference can help you protect your | | | | Unfortunately, the best thought-out |
| family and finances. | | | | retirement plan rarely takes into |
| The Consequences of Living Longer | | | | consideration living a long life. Put |
| Long-term care is a continuum of care | | | | another way, those assets and income |
| services and housing that you will need | | | | have been allocated to pay for |
| later in life. Think you won't live a | | | | retirement, not for the consequences of |
| long life? Think back 25 years ago. If | | | | living a long life. This results in the |
| you had cancer or a stroke, you simply | | | | need to invade principal and divert |
| died. Few ever heard of Alzheimer's. | | | | income. As a result, one of a seniors' |
| Today, it is the leading cause for | | | | greatest fear, outliving their assets, |
| long-term care services. The longer you | | | | literally may come true. |
| live, the more likely you are to need | | | | The Role of Long-Term Care Insurance |
| care. The question is not who will take | | | | The use of long-term care insurance thus |
| care of you, because your family will | | | | becomes an important part of planning |
| most often, but rather what will that | | | | for disability caused by living a long |
| care do to your family and finances. | | | | life. The product has two roles: helping |
| Long-Term Care is Usually Custodial Care | | | | keep families together and allowing your |
| Long-term care is defined as needing | | | | retirement portfolio to execute for the |
| assistance with your activities of daily | | | | purpose for which it was intended, |
| living (toileting, bathing, dressing, | | | | namely retirement. |
| eating, transferring from one point to | | | | From a family perspective, who will |
| another, and continence). It also | | | | provide your care? Like it or not, |
| includes cognitive impairment so severe | | | | children will play a key role. Long-term |
| that the individual needs constant | | | | care insurance (LTCI) doesn't replace |
| supervision. | | | | the need for family involvement in |
| If you need custodial care, chances are | | | | providing care but rather builds on it. |
| it will be delivered in the community, | | | | It pays professionals to assist the |
| not in a nursing home. Many of you have | | | | person with the toughest tasks such as |
| heard compelling statistics from The New | | | | toileting, bathing, feeding and |
| England Journal of Medicine stating that | | | | continence. This, in turn, allows the |
| 43% of those over age 65 will need | | | | family to provide care better and longer |
| nursing home care. What the article | | | | at home. That leads to a critical |
| actually said is that that number may | | | | question: have YOU planned for the |
| spend some time in a facility. The fact | | | | consequences of living a long life? |
| is, few end their days in one. Every | | | | From a financial point of view, LTCI |
| study conducted finds that care is | | | | allows your retirement plan to stay |
| overwhelmingly provided at home. The key | | | | intact. That is particularly important |
| question, of course, is who is going to | | | | given the recent steep decline in |
| pay for it? Who Covers the Cost? | | | | portfolio value. The product, in effect, |
| Medicare & VA | | | | protects the balance of your account |
| Medicare, the primary health care | | | | value. |
| program for retirees pays only for | | | | LTCI also protects income. Although you |
| skilled or rehabilitative care, not | | | | may qualify for Medicaid to pay for |
| custodial care in any venue. Medicaid, a | | | | nursing home costs by transferring |
| federal and state program for | | | | assets, your income (pension, social |
| financially needy individuals will pay | | | | security, IRA and or 401k payout) cannot |
| for custodial care, but primarily in | | | | be protected. When buying this |
| nursing homes. Funding for home care and | | | | insurance, look for a long-term care |
| assisted living is very limited and | | | | specialist. Consider their training, |
| based on availability of funds. Veterans | | | | educational credentials, and commitment |
| believe that the VA will pay for home | | | | to help solve your long-term care needs. |
| care, adult day care, or assisted | | | | The key is whether they talk first about |
| living. As with Medicaid, funding is | | | | a plan or a product. If they are |
| limited and generally based on | | | | interested in the plan, you are dealing |
| service-related disability. In fact, the | | | | with a professional. If they focus first |
| federal government has as much said this | | | | on product and price, consider getting |
| to veterans by encouraging them to | | | | another opinion. |