Long-term care: The insurance you'll most likely need in retirement
Philadelphia.com, October 15th, 2007
Suze Orman, in her book The Road to Wealth,
points out that odds of your home burning down are 1 in 1200, your auto
being totaled 1 in 248, but your chances of needing long-term care are 1 in 2. It is ironic that the insurance most likely to be used is not owned by the vast majority of people.
Long Term Care Insurance (LTCI) is a policy that
preserves your assets while paying for any assisted living or in-home
care services related to chronic illness, including home care, home
modification benefits, adult day care, and the many levels of eldercare
from assisted living to the nursing home. It provides independence and
choice for the insured while easing the financial and emotional burdens
that a chronic illness can have on loved ones.
Medicare will pay for rehabilitation up to 100
days per calendar year (only 20 days are 100% paid for, the rest
require an out-of-pocket payment). Remember, it pays ONLY for
rehabilitation. Once the care becomes custodial and the illness or
condition chronic, Medicare funding stops.
Medicaid eligibility is
dependent upon “spending down” your assets from the day that you apply,
and this includes the joint assets of your spouse, savings, IRA,
pension, 401K, and real estate holdings to mention only a few. You
will be expected to cover your own expenses until Medicaid decides that
you are eligible for funding, at which time you will have reduced your
financial means considerably. The Journal of Financial Planning notes that, “No one wants to go to a nursing home. Yet Medicaid planning accomplishes basically only one thing: qualifying the individual for payment in a nursing home. Medicaid pays little or nothing for home care, adult care, and assisted living.” Do you really want to spend your golden years meeting federal poverty guidelines?
As we have demonstrated, Medicare and Medicaid are not comprehensive, viable options for most people. Long Term Care Insurance offers a sensible and affordable alternative.
Read more of this article.
Long Term Care Insurance:
Learn more about whether long term care insurance is a good asset
protection strategy for your retirement on NewRetirement.com.