Healthcare is an ongoing and a constantly discussed topic here in the U.S. After all, it’s no surprise that it is so widely talked about as healthcare affects everyone – young and old – all over the country.
Virtually ignored is the cost of Long Term Care. Providing care to a loved one is an enormous burden, one that includes not only the cost of assistance, skilled and non-skilled, but also takes a toll on the health of the caregiver. Few couples when planning for retirement included a contingency for the cost of long term care should one of them need it. These costs will devastate even the most meticulously planned retirement portfolio. The care-giving spouse finds their lifestyle becoming ever more constricted, their prospects for a comfortable retirement foreclosed and any plans for leaving a legacy for children or grandchildren up in smoke.
The solution? Planning ahead with long-term care insurance.
Long Term Care Insurance is insurance not only for the afflicted, but also for the family. It is a type of insurance that covers the costs of long-term care services, including personal assistance with certain activities such as bathing, eating, using the toilet and moving around for those who need it. Unfortunately, most of those services aren’t covered by conventional health insurance or even Medicare. Few people have the financial ability to pay for ongoing care that may be needed in the event of a serious injury, illness or unexpected disability. That’s where long-term care insurance comes into play.
Because the potential lifetime cost for long term care is high, long term care insurance can be expensive. A common strategy to help manage the premium costs of this insurance is to self-insure for a part of the cost of the care. That is: to pay for a portion of the cost out of retirement income or savings. The balance of the cost is covered by the Insurance.
Another factor to be considered is that in a state like New Jersey, a partnership state, the eligibility rules for Medicaid benefits are relaxed if a qualifying Long Term Care policy has been purchased. This means that the healthy spouse is exempted from a portion of the spend-down necessary to qualify for Medicaid assistance.
As you can see, Long Term Care Insurance needs to be an integral part any retirement plan. Speak to an agent to learn how you can incorporate it into your plan.
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