By: John A. Shega, Owner, Aspire Insurance Agency
Choosing Between the wide variety of insurance products can be confusing and stressful. This article shares my observations on long term care from the perspective of both a caregiver and an insurance agent.
Long term care is commonly referred to as assistance or supervision one may need when unable to perform the basic activities of daily living (ADL’s). These ADL’s include bathing, dressing, eating, continence, toileting or transferring. Cognitive impairment due to Alzheimer’s disease or other brain disorders also apply. Long term care insurance helps with the costs associated with this assistance or supervision. These services can often be provided at home or at a qualified care facility. A 2010 survey indicated that over 78% of responders preferred to receive care at home, if at possible.
In a perfect world, everyone would have long term insurance or sufficient assets to cover any needed assistance or supervision. Unfortunately, the cost of long term care insurance can be cost-prohibitive for many families. Policy provisions such as the amount of insurance, waiting period and inflation protection provide premium and coverage flexibility. Quotes are easy to obtain and they are non-binding or obligatory.
Until the end of my father’s life, my father consciously decided not to purchase long term care insurance. He could afford the premium but he preferred to put his money into municipal bonds, annuities or an occasional slot machine. When he was diagnosed with Parkinson’s disease, he decided it was time to purchase long term care insurance. Unfortunately, a policy was not available due to his health condition. For the first time in my life I saw a look of fear on my father’s face. Without long term care insurance he knew a large portion of any needed care would come from the assets he had worked his life to save for his family. I truly believe that from that day on my father was hoping for a quick conclusion to his life. A day did not go by in the nursing home that he didn’t ask me, “how much did today cost me?” I loved- and love- my father; I hated the last few months.
Long term care was part of an employee benefit plan at work for my mother. She was allowed to retain the plan upon retirement with the condition that she pay the ensuing premiums. Each year she would ask if she should continue to pay the premium. That decision became much easier for her after my father’s ordeal. My mother was very healthy and living on her own until January o f this year. She now receives care at an assisted living facility after recovering from two unexpected medical conditions. Proceeds from her long-term care policy now well exceed that total premiums she paid in for her policy. She is fortunate, as that is not a guaranteed outcome.
So who is long term care really helping? The immediate and obvious answer may be the policy holder- my mother in this case. I would suggest that the coverage is helping me and other family members at least as much. If you can’t or wouldn’t be able to help someone with their personal hygiene or other basic and immediate needs, it is time to begin thinking about long term care or other options to pay for services.
So what are a few of my observations regarding long term care and aging parents in the last few years? They include:
- One must apply and be approved for long term care insurance. Consider your alternatives before you need them.
- Long-term care insurance can be expensive. Proceed cautiously; ask questions.
- “Saving for a rainy day,” is still great advice. Plan for the worst and hope for the best.
- Even a basic long term care policy provides some nice features. It could help preserve your current assets or supplement your savings, annuities or other financial products.
- Long term care insurance may benefit family members as much or more than the policyholder. Peace of mind is priceless.
- There are a variety of insurance products. Most people can’t afford every insurance coverage. Prioritize, decide and then move on knowing you made an informed decision.
Knowledge, communication and planning will go a long way in preparing for the future. Regardless of your current situation, it is never too late to plan for the future. I hope this article demonstrates that there is a lot to consider (LTC) when it comes to Long Term Care (LTC).