Are You Over 40? Buying Long Term Care Insurance Should be a Consideration

In spite of having another twenty-plus years of employment, most people, by the age of 40, start thinking about what they will have to live on when they reach retirement age.

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The missing piece that doesn't get discussed in the average employees benefit meeting is Long-term Care insurance. You may even think you have it because your employer may have you covered with "long term disability" which would provide you with a paycheck for two to four years if you became disabled. Long Term Care insurance, abbreviated LTCi, is something entirely different and needs to be a part of your portfolio. It should not be shoved to a back burner to be casually considered at some future point when you imagine you will have some extra money to pay for it. If you do that, you'll never have it, and you and your family will suffer for the lack.

LTCi is simply insurance that pays one or more caregivers to take care of you in your home, in an assisted living facility, or in a nursing home if you should become unable to care for yourself in your senior years. It does not pay your hospital or doctor bill, as your Medicare and Supplemental insurance will continue to pay those bills. LTCi pays for custodial, intermediate, or skilled care when you have a condition that is expected to last longer than three months. The policy begins to pay when your doctor says that you need help doing two or more (for a tax qualified policy) of the six daily activities (ADLs or when you have a cognitive impairment such as dementia. The six ADLs are: eating, dressing, bathing, continence, toileting, and transferring (moving out of your bed into a chair or wheel chair). You may think you will never be "one of those," but don't kid yourself. We have medications today that seem to keep us alive almost forever, but they don't keep us healthy. In fact, the United States has one of the least healthy populations of all the developed nations.

Medicaid pays a large percentage of the bill for those who require nursing home care. Medicaid does not, however, pay for you to receive care in your home, nor does it pay for assisted living. Furthermore, in order to qualify for Medicaid, you must first "spend down" your assets, surrender your life insurance policy, and turn over your property to the state. The result is devastating for those who still live in your home—such as a spouse.

In order to avoid losing "everything," many families opt to take care of a senior relative themselves in their own homes. Most have no idea what they are getting into until it's too late. A family care giver is often forced to give up a job, personal hobbies, and regular activities that take place with the younger family members as every minute of the day is somehow involved with the needs of the ailing member. The responsibilities for meal preparation, dressing and bathing, doctor visits, taking medicine, managing finances, and simple day to day companionship become a life-changing burden that no thinking person would want to put on the shoulders of his or her children.

Buying Long Term Health Care Insurance while you are reasonably young—in your 40s or 50s—will both save you from burdening your family members and will get you a lower price than if you wait. Furthermore, while you may be in good health now, waiting may bring chronic conditions that could prevent you from getting a policy later. Waiting will, for sure, bring you a higher premium. Do you want to pay a lower premium now—or take your chances on being able to get coverage in your 60s and have to pay a much higher premium out of your retirement. For the average middle-class individual, the decision should be a no-brainer.

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