Long-term care: a potential catastrophe

If you don’t plan for your future, you may not have an estate

Most of us, unless you’re living on the moon, have seen firsthand the financial situation we and our nation find ourselves in. It will take many years to correct what a lack of congressional leadership has wrought on us. However, we need to look a little further ahead to avoid another financial bombshell that will have a greater impact on future generations.

It’s long-term health care. Not to be confused with medical care, long-term care is when you need help taking care of yourself. It can involve a temporary need, such as when one has hip or knee replacement surgery. Or it can mean that one needs skilled care on a permanent basis in a nursing home.

Unless elected leaders make some serious changes, the unfunded cost of long-term care will swamp every government program designed for the public good. It will ruin the lives of those generations left to care for the millions of us who will need care in 20 or 30 years.

As I have often said to clients, “If you don’t plan for your future long-term care, you may not have an estate.”

But a private sector solution can resolve this potential catastrophe: long-term care insurance. This insurance provides support to pay for a care coordinator and professional caregivers. It can provide policyholders with care in their home, an assisted living facility or a nursing home.

Care ranges from basic needs (cooking, cleaning, bathing, getting dressed) to skilled care. Your doctor makes the decision when care is needed, not the insurer.

Tips to follow

A well-designed long-term care insurance plan can have an affordable annual premium. A long-term care insurance professional can present a plan that meets different needs and budgets.

Consider that 10 years of premium payments for a couple will not equal the cost of care, for a half year, for one person in a nursing home. Health and age are the criteria used to determine premiums.

And since no one knows what long-term care will cost in the future, a well-designed long-term care insurance plan can assure that the costs are covered tax-free, leaving your assets for other purposes.

Another important reason to own long-term care insurance is peace of mind – policyholders with a care plan will know the care will be provided when and where they need it.

Here are some tips to follow when you decide to look at long-term care insurance:

 • Plan ahead: Don’t wait until you are old and sick. The window of opportunity becomes very narrow.

 • Seek assistance: Long-term care is best understood with the help of an insurance professional or financial planner. Experienced LTC insurance advisors will help you through the insurance buying process by explaining the various features of a policy and how it will benefit you at claim time.

 • Check the financial strength of the insurance company: Look for stability, years of experience and financial ratings, such as A.M. Best or Standard & Poor.

It’s important to do everything you can to avoid this potential catastrophe.

Fred Hannon, owner of Benefit Planners Group, Amherst, can be reached through benefitplannersgroup.com.