The odds that you will end up in a nursing home before you pass away are high. Some studies show the probability of adults over the age of 65 needing a Long Term Care stay at some point during their lives nearing 50%. Most folks, including many of the clients we meet with in our estate planning practice have no plan to minimize the burden on their estates and their families. The truth is that people often avoid facing the reality of the Long Term Care threat, avoid taking action while they still can and avoid discussing their Long Term Care plan with their families.
The odds of falling prey to Long Term Care are staggering and the cost can be even more so. A year in a Georgia Nursing Home averages more than $40,000.00 and promises to keep rising. Many Americans hold the mistaken belief that Medicare and Medicare Supplemental Insurance will cover Long Term Care. At best, Medicare covers only part or all of the first 100 days of care. Most Long Term Care costs are paid out of your own pocket. Once your assets have been spent down to the applicable poverty level ($2,000) you may qualify for Medicaid, a government Long Term Care program. Medicaid is a welfare program.
Against this backdrop, Long Term Care Insurance (LTCI) has become one of the fastest growing insurance products in the country. Fortunately LTCI can be designed to fit almost any budget. Most LTCI policies share some common features you should know and should be looking for:
1. Benefit Amount: How much will the policy pay?
2. Benefit Triggers: When will the policy pay benefits?
3. Inflation Protection: Will the purchasing power increase?
4. Level of Care: Are Custodial and Intermediate Care covered, along with Skilled Nursing Care? Is Home Health Care covered?
As with any form of insurance, the policy is only as good as the ability of the insurance company to pay your claim. Check out the financial strength and reputation of the insurance company and seek competent legal counsel to interpret the contractual provisions of any LTCI policy before you sign on the dotted line. As always, when considering these types of planning strategies, talking with a competent estate planning attorney before you sign any contract is a must.