Is elder care insurance worth the money? How much of the elder care expense does the insurance cover?
San Diego, CA |
Will investing into elder care insurance a wise decision? Will it be worth it? And if so, how much of the elder care expenses does the insurance cover? Is there any conditional situations that insurance won't pay up?
Long term care insurance (i.e., elder care insurance) is showing increasing popularity as the Baby Boomer generation ages into retirement. As a result, there is growth in the number of insurers writing this kind of coverage and corresponding competitiveness in the kinds of coverages available and pricing. In fact, some employers now offer this coverage as part of their benefits package.
In deciding whether or not this coverage is right for you, you need to educate yourself on the variety of coverages available and whether they are a match for you personally in light of your family's history of geriatric illness, longevity, etc. A good place to start is requestig a copy of the free Long Term Care Guide available through AARP's "Know Your Options" webpage: http://aarplongtermcare.genworth.com/google/ppc/nonfiling.
This response is general legal and business analysis and not legal advice; thus, other attorneys may analyze this issue differently, particularly if there are undisclosed facts. I am licensed to practice in CA, but I am not your attorney and this response does not create an attorney-client relationship between us. Please review Item 9 of avvo.com’s terms and conditions, which is incorporated by reference as it if was reprinted here in full.
Your questions are really a personal value judgement based on one's finances and health. If you have a lot of money (whatever that is) then you can self fund this situation when it arises and save the premiums along the way.
Usually a nursing home stay is around 3 years or so. So you must balance these costs against the premiums you pay. However, if you never end up using this care then the premiums were for nothing.
This is a very uncertain and difficult issue. Your best bet would be to meet with your estate attorney first to discuss this issue as he or she has no vested interest in selling this product to you.
Hope this helps.
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I am going to agree with the previous answers that it is a personal decision, and I am going to add that you are very smart to ask this question. The answer is far more complex than you probably imagined. It involves the question, "How am I going to pay for the rest of my life?"
The answer to the question lies, in part, whether you anticipate getting older and whether you anticipate needing help with "activities of daily living" as you age. If you do feel that you might need help cleaning the house, getting dressed or even bathing someday, you then need to ask how you are going to pay for that help. Do you have the assets to privately pay for assistance? Do you have so few assets that you have no hope of ever being able to pay for help in the house? Or are you somewhere in the middle where you have assets but will rapidly run though them if you have to hire help or move into an assisted living facility?
Generally, long term care insurance begins to pay a daily benefit (for example, $120 each day) once you show that you need help with three "activities of daily living." You can use that benefit to pay for in-home care, an assisted living bill, or even for nursing home care. The benefit is a fixed amount (for example, $300,000), and you will receive your monthly payment from that amount until there is no money left in your policy.
Your options for long term care depend on your age, your health, and your budget. I am going to recommend you consult with three professionals in making the decision as to whether to purchase long term care, and all of them should be able to provide either a free consultation or an hours worth of advice for a minimal charge. The amount of information you will get about long term care insurance and long term planning for your situation will more than pay for your time and your cost.
Find an estate planner, a fee-only financial planner, and an insurance broker who represents multiple insurance carriers in your area. Ask these individuals to assess your financial needs, your insurance needs, and your need for basic legal documents (powers of attorney, wills, trusts). These three individuals will give you a comprehensive picture of where you are, where you want to be, and how to get there. Whether you need long term care insurance and how much insurance you need will be part of this picture.
If you get an answer that you have so few assets that you are not a candidate for long term care insurance or any sort of financial planning, I am going to refer you to a social worker in your area who can connect you with affordable housing and other benefits that will help you stretch your assets.
Good luck and happy planning!
This is not intended as legal advice and should only be used for informational purposes only. You should never believe any information that you receive on the internet, especially information that is probably being provided in the late evening hours when I should be sleeping.