Why Buy Long-Term Care Insurance?

past-dueRecently a friend of mine hosted a dinner party for six women, nowin their mid-sixties, who had previously been married. We get together once a month to play cards, go to the theater, or just sit around and have a grand old time. Currently, all the women are alone, either by choice or circumstance, and the subject of Long-Term Care Insurance came up for discussion.

Needless to say, the conversation became somewhat heated amongst the women. Nobody likes to think about losing their independence and having to rely on others for assistance. However, in a time of increasing life spans, uncertain economic realities, minimal increases in social security and low interest on investments, it’s a reality most of us will have to face. My friend, Laura, whosehusband is presently residing in an assisted living facility, said that for her, this type of insurance had become a necessity rather than a luxury. Why?

Laura’s husband is now in his third year of residence in a facility at a cost of approximately $42,000 a year just for room and board. Add to this his need for continuing medical and prescription care, and the result is that the couple’s financial resources are quickly being drained. During their marriage, Laura just assumed that the money they had saved would take them into their “Golden Years” with some left over as an inheritance for their children. However, that will not be the case if this goes on much longer and Laura can’t help thinking about what will happen to her if she, too, needs continuing medical care in or out of a facility at some point in her life. My other friend, Amy, a lovely person with a devil-may-care attitude and not interested in details, suggested that Laura apply for Medicaid for her husband’s on going care. As with most people unfamiliar with the rules, her thinking might not provide a realistic solution to the problem of a family’s dwindling financial resources.

To qualify for Medicaid in most states, a healthy partner is allowed to maintain a house, a car, and in New York, maximum assets of $115,920, which includes any Social Security payments as of 2013. This cap on assets can be much less in other states. In addition, if neither spouse resides in the family home, not only is there a cap on the value of the home, but a written document must be prepared stating that one of the spouses has an intent to return to the family home. When you accept Medicaid in exchange for ongoing care, upon the death of the last surviving spouse, the proceeds from the sale of the home belong to Medicaid. You cannot leave it to your children. Basically, Medicaid is a program for people who have exhausted all other resources and have no way to pay for ongoing medical or nursing care. It is not ever an effective means of protecting assets acquired over a lifetime of hard work and financial sacrifice.

Therefore, in planning for retirement, Long-Term Care insurance is just another means of protecting the hard-earned assets of a lifetime. If you are in the midst of planning for your future, we strongly suggest that you discuss your concerns with your agent. Knowledge, after all, is power and the lack of knowledge might just render you powerless at a time in your life when that is the last thing you need.

By: Karen Skoler, CPCU

No Comments Yet.

Leave a comment

Spence-Chapin has had the pleasure of working with the wonderful John Petschauer, Inc. for 15+ years. They have always provided excellent service to us–with great knowledge, expertise, and patience — even in the most challenging situations. There has not been one time when they have not been immediately accessible to us, even at a moment’s notice. We thank them for their work and celebrate their 60th anniversary, while looking forward to working with them for another 60 years and beyond!
I have worked with various individuals at Petschauer and have found each to be responsive, courteous, and thoughtful. Each year, the contact for my auto policy proactively seeks new bids and has consistently saved me money on my policy.
Ryan Huber
Quality attentive service is hard to find, but at Petschauer Insurance that’s what you can expect from their always friendly staff . It’s what we’ve experienced for all these many years.
John from Forest Pork Store Inc.
Excellence in customer service and it’s a one stop shop for all my insurance needs.
Tom Haines
From the first time I spoke with Lori Halloran at Petschauer Insurance, I knew she was a special person. She is a woman that conducts herself professionally, with compassion and full knowledge of all types of insurance Petschauer has to offer. While speaking with her, as she explained and answered all of my questions, I felt like I was speaking with family…which is another way to describe this company. She has a way of making very confusing decisions so simple and easy to understand. I even added another insurance policy to my two renewal policies because of her. My last renewals could have been processed via mail but I really wanted to take the time to drive and meet this wonderful woman face to face. She greeted me with this huge beautiful smile, which matched her personality perfectly. So, I just had to go back another time just to say “Hi” and bring her flowers in appreciation for all her help and also celebrate a new friendship. The Petschauer “Family” has been there for me since my first policy when I was 19 years old, and now I’m a “senior”. I’ve been with them forever and don’t plan on going anywhere else. Thank you Lori for your dedication and to the rest of the Petschauer staff.
Jane Deitlein
My family and I are long time personal and business clients of Petschauer Insurance. We sincerely appreciate your responsiveness and the quality of service that Petschauer provides. We have recommended your company to others because of our satisfaction with your service. We look forward to doing business with you for years to come.
Greg Weiss
Petschauer is great. I never had a problem.  They always call me back. Fabulous employees who are always willing to help.
Marty Bruno
My company has called on Petschauer Insurance for many years for its insurance needs: liability, liquor, auto, etc. Working with Erwin and his team has been a pleasure from beginning to present. They are quick to answer any question and provide sound advice. I have always felt that my and our needs are important to them, in theory and practice. They go the extra mile, and we continue to be well served.
Stephen Kennard from Canard Inc.
I have had the pleasure of working with various members of the Petschauer Team, both personally and professionally for 20+ years. And I couldn’t have done it without them. They go above and beyond. Heidi, Narima, Sherri and LuAnn don’t just bring to us the products they offer, they help me to understand the specifics and evaluate what makes the most sense for me, my family and my employees. I always feel I have a better understanding of an industry I have no understanding of so that I can evaluate the offerings in a smart way, cost effective way. They are proactive with renewals, allowing us the time to do our due diligence, evaluate our plans to be sure we’re properly covered and are always there to listen and help with special circumstances. Their kindness, caring and willingness to lend an ear when needed, really makes them stand apart from the rest. Heidi and her family have built a beautiful culture at Petschauer and I highly recommend them to anyone I meet.
Jamie Stedman-Novo
I have been with Petschauer Insurance for over twenty five years. The staff is knowledgeable and professional. Petschauer writes both my personal and commercial insurance and they provide excellent counseling. I truly trust the firm and their staff. Thank you.
Mike Matonti