Long-Term Thinking

Three things to remember when considering long-term care insurance.

Do you ever have something that keeps popping into your mind and you just can’t stop thinking about it? Things that come in threes really get my attention, and three things got me thinking about long-term care insurance this week.

First, my husband just received his annual update on his Federal Long-Term Care Insurance Program. It shows the new daily benefit amount, factoring in the 4 percent inflation adjustment he chose when he purchased the policy. I just checked the chart using the online inflation option tool and learned that when my husband is 85 years old, his $200 daily benefit amount (now $208 thanks to the 4 percent adjustment) will be worth $649 a day. This actually may not be enough to cover the full cost of care in a nursing home 30 years from now, but it certainly will help.

Even if my husband only needs care at home with me as the primary caregiver, I now know that I won’t be on my own. I can use this coverage to hire a caregiver to help out. I’m thankful that my husband decided to buy this protection -- and I did the same thing for him. It’s a gift to our children, too, since if we are not around to take care of each other when the time comes, the money will provide some relief to our children who are next in line to assume the role of primary caregiver.

But what if neither of us ever needs long-term care? That would be wonderful to me. That’s the way insurance works. Everyone pays in, but not everyone gets a benefit, so the money can be pooled and used for the claims that do have to be paid. In 2010, there were 2.5 million admissions to skilled nursing facilities in the United States. Many of these were for short rehabilitation stays after an illness or injury, but in some cases, these patients didn’t make a full recovery and needed assistance at home or in a facility.

Under the Hood

The second thing that brought this topic to mind was the 2012 Benefits Roundup conference in Dallas I wrote about last week. At the conference, Paul Forte, chief executive officer of Long Term Care Partners, which operates the Federal Long-Term Care Insurance Program under contract with the Office of Personnel Management, gave a very interesting presentation in which he compared the purchase of long-term care insurance to buying a car. When buying a vehicle, he said, it’s easy to be drawn to the cool features on the dashboard -- the gauges, the navigation system and the stereo. But you need to look under the hood to be sure the car will run smoothly and hold up over time.

The same is true of long-term care insurance, Forte said. Many people look at the daily benefit amount, the inflation protection options and the price, but fail to look under the hood. How stable is the company providing the benefit? How many people are insured by the company? How are investments protected? Here is a worksheet highlighting some of those “under the hood” qualities of the FLTCIP that you can use to compare with other policies you may be considering.

Cost Considerations

The third thing that made me think about long-term care insurance was Jane Bryant Quinn’s “Financially Speaking” column in AARP Bulletin this month. She wrote that despite the rising cost of such insurance, it’s a sound decision for those who can afford it. Without it, they may face extremely high bills for long-term care.

For increasing numbers of people, the cost of long-term care protection is out of reach. And for others, pre-existing conditions make it impossible to get such insurance. There are other options -- such as relying on Medicaid, self-insuring or hoping that family members will provide care. But remember, most federal employees retiring today will not meet the income and asset limits to be considered poor enough to qualify for Medicaid.

My husband and I have chosen long-term care coverage that will help us out if we need it. It probably won’t cover the full cost of lengthy care -- luckily, we have other resources to fill gaps if necessary -- but for us, it’s an important security blanket.

The National Institute of Transition Planning, Inc., contracts with Long Term Care Partners to produce content related to long-term care issues.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.