Should You Buy Long-term Care Insurance?
The most frequently asked question about LTC insurance
We have put together the list below to help answer this popular question. Couples who keep assets/finances separate.
Medicaid does not take prenuptial agreements into consideration when it comes to LTC services. Therefore, LTCi allows each person to get the care they want without thinking about if they will need financial assistance from their spouse or will be required to spend down their spouses’ assets to qualify for Medicaid.
People who don’t want to be a challenge or burden on their loved ones
For some people having a LTCi policy feels like they give their family permission to hire services. If the family tries to provide all of the care then the money spent on the policy is wasted. The only to get the money back is by hiring services for the policyholder.
Those who want to help insure their portfolio and assets
By having a LTCi policy, the money for long-term care services is there even if the market crashes and the portfolio decreases substantially. Even if the market is doing well, LTCi helps to prevent needing to draw down the portfolio to pay for LTC services.
For those that have children later in life
If the children still need financial support, LTCi provides funds to pay for LTC expenses of the parent allowing the parent to keep promised financial obligations to their child(ren).
Single individuals
LTCi allows them to have their choice of care and provider without being dependent on extended family or the government.
New couples with one individual earning significantly more
This can protect the wealthy spouse from their assets being depleted for either persons care. If only purchasing one policy, it is generally recommend purchasing on the person with fewer funds so they won’t have to use the wealthier spouses assets. Hybrid policies can come in handy in these situations since the wealthier spouse can pay for the policy to protect their estate and if their spouse does not end up needing services the death benefit can be issued to the estate.
People who are in a second marriage
Things can get tricky with organizing care and spending down assets in a second marriage while trying to balance a potential inheritance for children from a previous marriage. Since the money is already spent on the LTCi policy, there is no reason for the children or loved ones not hire the needed care.
Individuals who want control of their care
There is no way to predict the future, how the market will do or how family members will act if the need for LTC arises. What happens if $9000 a month needs to start being drawn from the estate each month for care? By having an income stream through a LTCI policy, the worry of running out of money or depleting promised inheritances is taken out of the equation when deciding care. LTCi policies allow you to choose the type of care - nursing home, assisted living, adult day care and home care services as well as the actual provider.
Not everyone should buy long-term care insurance but everyone should have a long-term care plan. ■
Long-Term Planning Associates, LLC
Tel: (203) 331-1818 Ext. 2
Fax: (866) 297-7758
Email: BEverett@LTPlan.com
Web: www.LTPLAN.com