No one likes to think about being incapacitated or diagnosed with an illness that may limit their mobility or cause them to lose their mental faculties. It scares me to death. My family recently dealt with this in real-time with my uncle, who passed away recently at his home after a year with an inoperable brain tumor. Emotions aside, this was a huge financial burden on his family since he was the breadwinner, and they used every cent of savings to pay for his in-home care. They had no long term care insurance. The more conversations I have with clients during our summer tax planning meetings, the more I hear that no one has long term care insurance. I estimate that fewer than 10% of my clients have a policy.
After hearing the details of my uncle's struggles and his family's situation from my mother, I had a very REAL talk with my wife, Meghan, about the absence of long term care insurance in our financial plan. Once we were done, we called our financial planner and did something about it.
What is long term care insurance? It's an insurance policy that helps pay the cost of long term care beyond a predetermined period. Long term care isn't typically covered by a health care policy.
Who needs long term care? Those who cannot perform the daily activities of normal life are considered to be in need of long term care...we're talking about bathing, dressing, eating, transferring and walking. My uncle, for example, couldn't get out of bed without assistance and as his condition worsened, he needed almost round the clock nursing care.
How hard is it to obtain? You need to contact your insurance provider or financial planner and start the conversation. It's just that simple. If you don't have someone to call, please let me know and I'll provide the name of my financial planner. He's awesome and I know he can help you. We will all work together to figure out the best plan for you.
Is it complicated? Well, it is insurance, so yes there are inherent complexities. But don't let that stop you from talking to someone about it.
I know this isn't a "nice" conversation, but it's something that needs to take place within your family. It's a little bit like discussing your will....it's not dinner conversation. However, when I think of the choices here....allow my family to be burdened with my care expenses should something happen to me (at the average cost of about $7k/month) or have an insurance policy that would pay those expenses in the event something happened, it became a no-brainer. And really, who has $7k/month just lying around? Let me know if I can help you with this.
Next time, I'll discuss the tax issues surrounding long term care insurance premiums.
