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Do I need long-term care insurance?

Joan Hatem-Roy, Chief Executive Officer

Q: My husband and I are trying to determine if it would be in our best interest to purchase a long-term care insurance policy. We have seen my elderly mother’s assets plummet over the last few years since she has been paying privately for the care she needs to stay at home. We never would have expected it to be so costly. Where can we get objective information about this type of insurance, costs involved and coverage amounts?

A: A financially responsible consumer shopping for a new car, on a limited budget, most likely will decide to purchase an economical model. On the flip side if money is not a concern a high end luxury automobile may be a choice. Not to minimize the importance of long-term care insurance but the approach should be the same. Reality is you get what you pay for but can you afford the expense? It is generally recommended the policy premium should not exceed 5% of your income.

Long-term care insurance policies were introduced in the 1960s. There has been a significant evolution of the product since that time. At one time there were around 100 companies offering the policies, currently there are only about a dozen on the market. The policies fall into three categories: individual, employee sponsored and association sponsored policies. The menu of benefits vary greatly and could include coverage of home health care, personal care, assisted living facilities as well as care in a skilled nursing home. Each policy should be scrutinized to determine if the care is what you believe will best meet your future needs. When reviewing policies take into consideration your age, life expectancy, gender, family situation, health status, income and assets.

Someone who logically can not afford the policy premiums, has limited assets/income and has difficulty meeting the costs of basic necessities of living should not even consider purchasing a long-term care insurance policy. If a person or couple has considerable assets/income, want to protect some of those assets and prefers to pay for their own care may be a candidate for this coverage. This is not a decision to be hastily made. Take time and educate yourself about the products available. The National Association of Insurance Commissioners publishes “A Shoppers Guide to Long-Term Care Insurance” which can be found on-line at naic.org/documents/prod. Another excellent resource can be found at mass.gov/info-details/do-you-need-long-term-care-insurance.

 

Are you struggling caring for an older adult or having difficulty locating resources? Our staff is available for a no-cost consultation, set up at your convenience, to help guide you through your caregiving experience. For more details or to schedule an appointment, please call 800-892-0890.

Do you have a question? We encourage inquiries and comments from our readers. Please direct your correspondence to ageinfo@esmv.org or Elder Services of Merrimack Valley and North Shore, Inc., Age Information Department, 280 Merrimack Street, Suite 400, Lawrence, MA 01843. Joan Hatem-Roy is the Chief Executive Officer of Elder Services of Merrimack Valley and North Shore.