Talk about LTHC while You Still Have the Chance

One of the best planning decisions my mom made for herself when she turned 64 (10 years before she was diagnosed with Stage 4 lung cancer and given 18 months to live) was to purchase long-term healthcare (LTHC) insurance. Using her professional skills as a purchasing agent, she literally calculated “how much” she thought would need to fund having part-time, paid nursing help in her home so that she would have the option of dying at home.

My sisters and I were so lucky to have this support in our caregiving toolkit. As my mom became less and less able to do things on her own, it made a huge difference to have a professional certified nursing assistant (CNA) working from 8:00 am to Noon on 5 days per week. That’s when we ran the errands, did the grocery shopping, and generally tried to “catch up” and keep everything else on track.

One shocking statistic I’ve found recently is that only 13% of those aged 65+ actually have LTCH insurance. And that percentage is likely to decrease!

I don’t know about you, but I think LTHC insurance should be an important consideration in everyone’s plan for aging and making it to the end. And like so many aspects of planning for caregiving, sooner is better, since the prices can rise with age and health complications.

I know, I know. It’s expensive and getting MORE expensive everyday. I’ve heard that some people are not renewing these days, because the premium increases are rising so rapidly. But it’s not going to get any cheaper, so dropping out (or not even considering it) is a dangerous game.

The statistics tell us that approximately 70% of those aged 65+ will require long-term care services, and the numbers are staggering (12+ million by 2020). The costs of that care are already outrageous, with unskilled home helpers’ hourly rates starting at $20.00. That really adds up on a daily, weekly and monthly basis – imagine having to pay over $4,000 per month just for basic help, 8 hours per day, 7 days a week!

There are a number of good providers to check into, and there are even online services that will check through several providers to help you obtain the best quote. The important thing is to educate yourself about the basics, and definitely shop around, since prices can vary quite dramatically.

Some key points that you’ll want to know:

  • How much is the total cover?
  • How long is the elimination period?
  • What are the requirements for allowed use?
  • Is there a death benefit?
  • What is the cash-in value?

I’m really happy with the policy that I found. It’s provided by Lincoln Financial Group and is called “Lincoln MoneyGuard”:

https://www.lfg.com/ss/Satellite?c=Page&cid=1427931858137&pagename=LFG%2FPage%2FProductPage

The highlights of my policy are:

– The cost of the policy to me is $65,000, paid over time with greater vesting in the program as I approach the total.

– The value of the policy is 4x that base amount, so I will get $260,000 worth of long-term healthcare once I start using it.

– That $260,000 can be used flexibly for “in-home help” or “assisted living” or even a nursing facility, if and when I need it. I figure in the worst case, with full-time help in my home, I could possibly “last” for between 1-2 years. It’s not enough, but it’s better than nothing!

– If something should happen to me before the full policy is paid for, the policy has value (determined by the year of vesting), and can be used up to whatever that limit is (as long I continue paying the premiums)

– If everything goes well and I decide at 80 or 85 that I don’t need it (or want to take the risk of not having it), I can cash it in for $50,000

– If I should die without using it, there is a $95,000 death benefit

There is no doubt that the need for long-term care is pretty much inevitable, for your loved ones and for YOU. Having LTHC insurance is a good way to protect yourself for coverage of future expenses.

Great article to get you started on your information gathering and consideration:

Review of the top three picks from this website: Mutual of Omaha, Transamerica, MassMutual
https://www.reviews.com/life-insurance/long-term-care/

Great background information on LTHC insurance, sources, and considerations:
https://www.aarp.org/health/health-insurance/info-06-2012/understanding-long-term-care-insurance.html

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