Many of us don’t insure anything that doesn’t have a dollar value. We insure cars, houses, diamond rings etc., so why is it that we don’t insure ourselves?
We are our most valuable asset.
Most of us do not think about death or long term care. Questions and thoughts such as these we tend to “sweep under the rug”:
• What happens when a loved one needs care in a nursing facility or passes away pre-maturely?
• What impact will either of those events have on our families?
• Will the kids take care of a parent?
• Will the parent move in with the kids?
• Do we want our parents or grandparents in a state run institution?
As an insurance agent, I know the answers to these questions….. My goal is to help you see an affordable solution to the answers.
I understand Long Term Care insurance isn’t something we want to spend money on. Often what I hear from my clients is: “What if I don’t ever use the benefit - I will be throwing the money away?”. When I am asked my personal opinion about Long Term Care Insurance, I passionately say this: “I don’t want to be a burden to my kids, and I really don’t want to spend my older years being dependent on the State. If I don’t need my Long Term Care Policy and I die peacefully in my sleep than I did right by my family”.
Doing nothing is not an answer. It will have a higher cost then any premium you may pay.
Let’s examine the Cost of Care:
Depending on where you live and the type of care that you require, long-term care expenses can exceed $75,000 per year. (1) In some states, that cost of care can be much higher. At these rates, the choice to self-insure can be very challenging. A common misconception among people without Long Term Care Insurance is that government health programs such as Medicare and Medicaid will cover these costs. While Medicare provides limited coverage for nursing home and home care services, it is designed to pay for the treatment of acute, short-term illness — not ongoing care associated with Activities of Daily Living, (2) such as eating, bathing, and dressing. Simply put, Medicare affords very limited nursing home and home care services.. Medicaid, a different program entirely, may cover ongoing costs associated with long-term care. However, it requires that recipients meet strict asset and income eligibility criteria, and care is restricted to Medicaid-approved services and facilities.
So by now you might be thinking to yourself: “What if I don’t use the insurance? All that money will go to waste.” ……. Not so!
In last month’s blog, I covered the need for Life Insurance. If we all can agree that our lives should be insured, then I can show you there is a way to insure our lives and pay for Long Term Care as well.
Did you add an Accelerated Death Benefit Rider to your permanent life policy when you purchased it? What this offers you is in the event that you are diagnosed as terminally ill, you will be allowed to take an advanced payment of a portion of your death benefit to pay for medical expenses or long-term care. If you keep your policy in-force, but you do not use your long-term care protection, although you have paid the rider charge for the option to accelerate the death benefit, you haven’t spent decades paying premiums for a policy that never pays any benefit at all. Additionally, if you begin collecting monthly benefits under the Accelerated Death Benefit Rider, but do not receive the full death benefit of your policy, the remaining death benefit will be paid to your beneficiaries at your death.
There you have it -the best of worlds: Life insurance and LTC rolled into one!
Richard Montenegro, Jr.
FIS Marketing, LLC
3900 Veterans Memorial Highway
Suite 251 (Field Office)
Bohemia, NY 11716
1. Gross, Jane. “How Medicare Fails the Elderly.” The New York Times, October 15, 2011.
2. As defined in the Internal Revenue Code Section 7702B.