Long Term Care Planning Questions
Do you have a long term care (LTC) plan?
Before changes in your age and health eliminate options available to you, act now and do not wait.
What is LTC Planning?
Planning to protect the family from the devastating financial, physical and emotional consequences of an unexpected long term care event.
"What, Who & How" . . .
Critical in the LTC planning is determining what kind of care is to be provided, who is to provide the care and how the care is to be paid for. Options for funding the LTC plan include self insurance, long term care insurance, Medicaid, reverse mortgages, family support and other funding sources.
What is long term care?
Long term care is the custodial care to help a chronically ill person or a person with Alzheimer's or dementia function through the day with his or her daily activities. Most prefer that the care be provided at home so that the individual can remain independent as long as possible. Later, assisted living may become an option. Nursing home care is usually the last care.
What are the benefits of advanced LTC planning?
What are the average costs for LTC in Colorado?
Home health aide, Medicaid certified - $36.00 / hour
Assisted living private one bedroom - $38,000 per year
Nursing home, private room - $85,000 per year
(Denver Metro Area)
What are the risks and consequences with no planning?
Without prior planning, there can be serious risk and consequences to the financial, physical and emotional well being of those who care about you.
Is LTC planning about you and about insurance?
No, LTC planning is not about you! It is about your family! This is why I always encourage participation by family members for their input and support. If you, your family and your trusted advisors determine that long term care insurance is the most appropriate funding tool, there is either traditional long term care insurance or linked asset insurance, the selection of which depends on your financial and tax situation, goals, and tolerances. While long term care insurance is not for everyone, long term care planning is for everyone, regardless of what their plan turns out to be.
What is linked asset long term care insurance?
Recently, some of the leading long term care insurance companies have significantly raised their premiums and reduced coverage and benefits. Several carriers have completely exited the market. Premiums on older policies were not priced correctly by the insurance companies and as more long term care claims are being filed, the insurance companies are having to adjust premiums and benefits. The low interest rate environment and lower than expected lapse rates have also contributed to this turmoil in the industry.
For the appropriate client and situation, linked asset long term care policies are becoming a more attractive alternative to traditional policies. These hybrids are built on either a life insurance policy or an annuity contract and offer several important advantages:
Before changes in your age and health eliminate options available to you, act now and do not wait.
What is LTC Planning?
Planning to protect the family from the devastating financial, physical and emotional consequences of an unexpected long term care event.
"What, Who & How" . . .
Critical in the LTC planning is determining what kind of care is to be provided, who is to provide the care and how the care is to be paid for. Options for funding the LTC plan include self insurance, long term care insurance, Medicaid, reverse mortgages, family support and other funding sources.
What is long term care?
Long term care is the custodial care to help a chronically ill person or a person with Alzheimer's or dementia function through the day with his or her daily activities. Most prefer that the care be provided at home so that the individual can remain independent as long as possible. Later, assisted living may become an option. Nursing home care is usually the last care.
What are the benefits of advanced LTC planning?
- Protect your retirement portfolio and income
- Give you choices in the types and level of long term care
- Prevent your becoming a burden on your family and friends
- Allow you to continue your lifestyle and gifting to church and community
- Protect the financial, physical and emotional well being of your family.
- Allow your spouse or partner to become a Care Supervisor instead of a Caregiver
- Give you Peace of Mind
What are the average costs for LTC in Colorado?
Home health aide, Medicaid certified - $36.00 / hour
Assisted living private one bedroom - $38,000 per year
Nursing home, private room - $85,000 per year
(Denver Metro Area)
What are the risks and consequences with no planning?
Without prior planning, there can be serious risk and consequences to the financial, physical and emotional well being of those who care about you.
Is LTC planning about you and about insurance?
No, LTC planning is not about you! It is about your family! This is why I always encourage participation by family members for their input and support. If you, your family and your trusted advisors determine that long term care insurance is the most appropriate funding tool, there is either traditional long term care insurance or linked asset insurance, the selection of which depends on your financial and tax situation, goals, and tolerances. While long term care insurance is not for everyone, long term care planning is for everyone, regardless of what their plan turns out to be.
What is linked asset long term care insurance?
Recently, some of the leading long term care insurance companies have significantly raised their premiums and reduced coverage and benefits. Several carriers have completely exited the market. Premiums on older policies were not priced correctly by the insurance companies and as more long term care claims are being filed, the insurance companies are having to adjust premiums and benefits. The low interest rate environment and lower than expected lapse rates have also contributed to this turmoil in the industry.
For the appropriate client and situation, linked asset long term care policies are becoming a more attractive alternative to traditional policies. These hybrids are built on either a life insurance policy or an annuity contract and offer several important advantages:
- Fixed guaranteed premium rates.
- Tax advantages provided by the Pension Protection Act (PPA) and the Health Insurance Portability and Accountability Act (HIPPA) including tax fee long term care benefits, 1035 tax deferred exchanges and more.
- Return of at least the full amount of the paid in premium.
- Heirs receive the full account balance after payments for long term care expenses.
- More relaxed underwriting.
Myths about Long Term Care
Myth: Long Term Care is already covered.
Truth: Except for Medicaid welfare recipients and very limited and short term Medicare payments, the government does not pay for long term care. Our government is broke and will never be able to take on this huge expense. Likewise, health, disability and other private insurance do not pay for long term care.
Myth: I do not need it.
Truth: The statistics clearly show the high risks. Regardless, the significant and real consequences to those who care about you outweigh any risk. Even for the super wealthy, leveraging large financial risks is prudent. Thinking that your children or family will take care of you is unrealistic due to the financial, physical, logistical and emotional stress. If your family has a history of longevity, it is even more important to plan as you have a higher chance of eventually needing custodial care.
Myth: It is too expensive.
Truth: Compared to what? The average monthly cost of care is more than the average yearly cost of a long term care insurance policy. Just imagine how expensive it will be if you do need long term care and you have done nothing.
Myth: Long Term Care is nursing home care.
Truth: Proper long term care planning is actually "Nursing Home Avoidance" planning. Today, the great majority of those receiving long term care receive it at home or at an assisted living facility and not at a nursing home.
Myth: It is better to wait.
Truth: Procrastination is unwise for two reasons. First, your health could change such that you become uninsurable. Second, as you get older, your premium increases making it more difficult to afford the premiums.
Myth: If I never use my long term care insurance policy, I have wasted my money.
Truth: This is a legitimate concern; however, another way to look at this is that if you stay healthy and never need your traditional long term care insurance policy, that is very good and you should count your blessings. Much like your fire, auto, life and other insurance coverage - you hope you never need them. However, if this is stopping you from doing something or funding your long term care plan, there are the alternative linked asset solutions that resolve this concern.
Take action now!
Perhaps you have parents who are still healthy enough to get coverage. Perhaps you have children or a spouse and you do not want to become a burden on them. At the very least, start a conversation about this very important planning with your family.
Truth: Except for Medicaid welfare recipients and very limited and short term Medicare payments, the government does not pay for long term care. Our government is broke and will never be able to take on this huge expense. Likewise, health, disability and other private insurance do not pay for long term care.
Myth: I do not need it.
Truth: The statistics clearly show the high risks. Regardless, the significant and real consequences to those who care about you outweigh any risk. Even for the super wealthy, leveraging large financial risks is prudent. Thinking that your children or family will take care of you is unrealistic due to the financial, physical, logistical and emotional stress. If your family has a history of longevity, it is even more important to plan as you have a higher chance of eventually needing custodial care.
Myth: It is too expensive.
Truth: Compared to what? The average monthly cost of care is more than the average yearly cost of a long term care insurance policy. Just imagine how expensive it will be if you do need long term care and you have done nothing.
Myth: Long Term Care is nursing home care.
Truth: Proper long term care planning is actually "Nursing Home Avoidance" planning. Today, the great majority of those receiving long term care receive it at home or at an assisted living facility and not at a nursing home.
Myth: It is better to wait.
Truth: Procrastination is unwise for two reasons. First, your health could change such that you become uninsurable. Second, as you get older, your premium increases making it more difficult to afford the premiums.
Myth: If I never use my long term care insurance policy, I have wasted my money.
Truth: This is a legitimate concern; however, another way to look at this is that if you stay healthy and never need your traditional long term care insurance policy, that is very good and you should count your blessings. Much like your fire, auto, life and other insurance coverage - you hope you never need them. However, if this is stopping you from doing something or funding your long term care plan, there are the alternative linked asset solutions that resolve this concern.
Take action now!
Perhaps you have parents who are still healthy enough to get coverage. Perhaps you have children or a spouse and you do not want to become a burden on them. At the very least, start a conversation about this very important planning with your family.