Either because it is mandatory, or because of our own good sense, we typically insure against risks having the potential to significantly erode our assets. So, we insure our automobiles and ourselves from the liability of an accident for which we may be at fault. We insure our homes against fire, flood and the potential accident which may take place on our property. And lastly, we obtain health, life, and disability insurance, again for the protection these insurance programs offer.

The Retirement Scene

Approximately fifty years ago, a man retiring at age 65 had a life expectancy to age 67. Today, a man retiring at 65 has a life expectancy to age 81 and a woman to age 86.

For a couple reaching age 65, the probability is that 7 out of ten will require nursing home care during their lifetime for at least one spouse.

If you've been responsible for placing a parent or relative in a nursing home. If you've had a friend enter a nursing home. If you've made inquiries to nursing homes, you will know that the average cost of a nursing home, is in the range of $30,000 to $40,000 annually.

How long could you or a parent afford to pay nursing home costs without selling a home or losing one's life savings?

You might find it helpful to know that women, on average spend three to five years in a nursing home and men approximately three years. Total costs . . . . $90,000 to $150,000. I expect these costs to increase due to both inflation and the continuing imrovement in life expectancies.

Why Long Term Care Insurance

Contrary to popular belief, Medicare will not pay for Long Term Nursing Home Care. Medicare will pay for the first twenty days in a skilled nursing facility immediately following a hospital stay.

Compare twenty days funded by Medicare to the average length of stay measured in years! How long before you have exhausted all your assets and life savings?

If conserving your wealth is important to you, then Long Term Care Insurance certainly deserves your strongest consideration.

What's Good, What's Not?

Universally , Long Term Care policies make use of the term, Activities of Daily Living. Depending on the state in which you reside, policies may describe five or seven of these activities and they generally include:

Eating
Toileting
Dressing
Continence
Transferring

Some policies require the inability to perform two or more of these activities, while others will provide benefits for personal assistance It is my observation, that most nursing home residents have not lost the ability to perform these functions, but most certainly do need assistance. A policy providing benefits for personal assistance is much more generous and preferred.

Organic vs. Non-Organic Mental and Nervous Disorders

Policies typically pay benefits for individuals suffering from organic mental and nervous disorders. Many policies will not provide benefits for non-organic disorders.

Dementias and Alzheimers are two examples of mental and nervous disorders with a recognized organic basis. Depression is an expample of a mental disorder without a commonly accepted organic basis. As many residents in nursing homes do suffer from non-organic mental and nervous disorders, a policy providing benefits for these conditions is strongly preferred.

Inflation - yes ... no ... maybe

Most insurance companies give you three inflation choices:

• None
• Equal
• Compound

First, it is important to remember each of these choices will have a profound impact on policy premiums.

Suppose you purchase a policy with a $100 daily nursing home benefit and no inflation protection. As your nursing home costs increase each year, you will shoulder a greater amount of the cost increases - you've no inflation protection.

Is this bad? Perhaps, especially if you're relatively young when either purchasing the policy or when entering a nursing home. if you are between the ages of 40 to 65 when purchasing Long Term Care Insurance, you probably should purchase an inflation benefit.

Summary

There are a lot of factors to consider when purchasing Long Term Care Insurance. Too many for me to cover adequately on my Webpage. This is an increasingly important form of insurance and I will be happy to discuss your needs or send you information. Quality need not cost more and this is one form of insurance protection in which quality comprehensive coverage is essential.

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