Long-Term Care Insurance: Don't Grow Old Without It

By Frederick "Rick" A. Fisher
This article first appeared in The Union on Feb 21, 2016. Click to view as PDF.

“Medicare And You 2015” reported that 70 percent of Americans 65 or older will need long-term care in their lifetime. With the average cost of a private room at a nursing home at $240 per day, and the average stay for non-Alzheimer’s patients at just over two years, many of us will have to come up with over $200K for care. For patients with Alzheimer’s, that cost could easily double.

Unlike auto and home insurance which are pretty much mandatory, LTCi is still optional. However, if you look at it from a risk-reward standpoint, it should be the most desired insurance for Americans 50 to 70 years old.

In the 20-plus years that we have been offering LTCi, the biggest hurdle to purchasing this valuable insurance is the cost. Fortunately, in the last few years, the numbers of options to purchasing long-term care has increased. There are now products to fit almost any budget — to at least cover part of the risk.

Let’s consider the situation for two fictional couples.

The Thomases and Smiths are both in their mid-50s and in good health. The Thomases have a substantial net worth and a large number of liquid investments. Their parents both lived long, healthy lives without needing any long-term care. Their biggest concern is to pass on assets to their heirs.

A universal life insurance policy with a long-term care rider provided the Thomases with protection against an early death and a long-term care financial burden. By using a portion of their liquid investments, the Thomases converted $100,000 into $250,000 of death benefit and $400,000 of long-term care benefit.

The Smiths’ perspective regarding long-term care is different than the Thomases. Mrs. Smith’s father needed skilled nursing care in a long-term facility. With no insurance in place, the financial burden became overwhelming.

The Smiths could not plan to rely on their savings to cover any potential long-term care costs, so we focused on finding the right insurance product to fit their budget — and reduce their risk as much as possible.

By utilizing a traditional term LTCi policy with a reasonable annual premium, the Smiths successfully protected nearly all of the $240 average daily cost.

The moral of the story — get current information on the pros and cons of Long Term Care insurance relative to your specific circumstances. Research all the new options available. Long-Term Care insurance might be expensive. Being without long-term care can be devastating.

Call us for a consultation and let’s check your needs before it is too late!

Frederick Fisher is a Certified Financial Planning Practitioner and Insurance Agent. Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser. Additional advisory services offered through Ostrofe Financial Consultants, a Registered Investment Adviser. Ostrofe Financial and NPC are separate and unrelated companies. For questions or suggestions, contact Rick Fisher at (530) 273-4425, or rick.fisher@natplan.com; branch address: 565 Brunswick Road, Ste. 15, Grass Valley, CA 95945.