Why seniors Don & 39; t Buy Long Term Care
1 . In my experience, more than half of the people who shun long-term care insurance do so because they feel they will never need. It is difficult to visualize to a nursing home. Statistically, half of these people will right.
However, there are a number of scenarios in which the person may need some kind of assistance, but never see the front door a nursing home. In fact, the majority of people who need long-term care can receive care without ever leaving their home.
When you stop and think about it, the decision not to buy long-term care insurance is a decision, even insurance. That can be expensive and may devastating.
The average cost of a nursing home is now 80000 dollars a year and rising. At this price, but not for a few years to grind through a modest property. If both the man and woman must nursing home, the time to dispel property is a section in half.
A person can spend 40 years a career in the building of a pension nest egg. They spend another 40 + years conservatively their money, while the administration try to keep pace with inflation. If they need to enter a nursing home during the last five years of her life, it could be all over quickly.
It need not be that way, as you will soon see.
2. Many people think, long term care insurance is too expensive. You can right.
If a person waits too long to apply, they can be sticker shock. Prices are based on age. However, long-term care comes with a lot of bells and whistles. If you strip away some of the options that may be nice to have, but not essential, the premium is a much lower.
If a person looking at a plan of care includes only the premium is still lower. This takes care of the 50% who never need to enter a nursing home home.
The only thing better without coverage a premium that I get to a minute.
3. Most people react to a problem only when the problem surfaces. If a person waits to sign up for long-term care insurance until they are suffering from health problems, every care insurance plan can be prohibitively expensive or very unavailable.
The Solution: The Long Term Care Insurance is not Policy
The The insurance industry is very competitive. This very competitive Introduces New creative thinking and policy. Enter " Long Term Care Annuities. " There are only a few companies with this product and the structure differs from company to company. To give you a general overview of the concept and mechanics, I am going to describe the main aspects of an aviation company. Check with your financial planner for all options.
The underlying a " " LTC annuity is a life annuity. Nothing new here; pensions have been around for a hundred years. They are sure the money goes to a competitive interest rate, and the account grows tax-deferred.
To LTC a life annuity, the insurance company has " in a long-term care option. " It is not a driver. There is no premium. It is simply an option to choose when long-term care is needed. Sweet.
To qualify, a person needs only to lose two of the six ADL (activities of daily living). ADL insurance are & 39; method for determining the qualifications for the level of care. They eating, bathing, dressing, toilet, transfer (on foot) and continence.
The person must not in a nursing home. You just have to have demonstrated an inability to meet two of the six ADL to qualify for the long-term care option in its annual pension in action.
An Example
If a male, age 60 200000 LTC into a life annuity, where a conservative interest - that the policy would be at 300000 dollars in the next ten years. If 300000 US dollars were in a life income, the person would receive $ 2200 per month for the balance of life. A 8.8%. Not so bad, because it ensures that person no matter what.
If needs long-term care at the age of 70 4500 a new month.
Conclusion
These products, the long-term care pensions, the opportunity to receive long-term care benefits only if they are needed. There is no separate long-term care insurance policy, no premiums and usually little or no underwriting. Now there are no excuses. Those who feel they will never need long-term care is never easy LTC exercise their option. Those who find the long-term care is too expensive, an alternative without premiums. In addition, those who can get health care benefits means, as it simplifies or non-existent.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter " The Estate Preservation Advisor ". For advanced, easy-to-understand financial planning resources and techniques to make your income, cut taxes and keep your property and to claim that the free video, " How to Sell Your Life Insurance Policy for more than the cash value and ; quot;, go to http://theestatepreservationadvisor.com/rd/subscribe.htm elmer wai
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