Long Term Care Options

MEDICARE AND ANNUITIES
I have posted in the past about Long Term Care Issues. Medicare DOES NOT COVER LONG TERM CARE. It will cover short stays in nursing homes. For more specific information please go to:

MEDICARE OFFICIAL WEBSITE WITH LONG TERM CARE INFORMATION

PAYING FOR LONG TERM CARE
The tradional options for paying for Long Term Care (which can run around $4,000 a month) are personal finances, long term care insurance, or depleting all savings - and ending up filing for Medicaid.

LONG TERM CARE INSURANCE
Of all of these traditional options - Long Term Care Insurance is probably the most attractive. However, as people age, premiums can get very expensive. Plus, prices rise - so that $100/day policy which looked great in 1995 - may not pay the bills in 2005. The real drawback to most long term care policies - though I do think they can be a very viable solution - is that if the policy is never used, that money is lost. However, that's the situation with almost all insurance. If you buy auto insurance, and never have an accident - your premium dollars went to pay for somebody else's accidents, plus the stockholders dividend checks. C'est La Vie!

GET AN INSTANT LONG TERM CARE INSURANCE QUOTE


LONG TERM CARE ANNUITIES AND ANNUITIES WITH LONG TERM CARE
Another solution is a new product called a long term care annuity. One popular plan requires a minimum of $36,500 to be deposited in the annuity. The annuity money actually earns interest and still pays off the included long term care premium. The money still grows while the premium is paid.

I guess the best part of this solution is that if the long term care money is never used, the bulk of the investment will still be held in the account. Unlike most annuities, you will have to qualify with some health questions - though they are generally simplified.

Many annuities have a long term care rider - i.e. you can take your money out without any penalty or surrender charges if confined to a nursing homes. The difference between a Long Term Care Annuity and a Long Term Care Rider on a normal annuity is that the Long Term Care Annuity actually contains Long Term Care Insurance - i.e. a claim won't deplete the annuity principle. With a normal annuity and a long term care rider - the money is just withdrawn without penalty.

CONCLUSION
If you don't have many assets, you may just want to take a risk. If you have to deplete your assets for Medicaid to kick in, the loss may be much less than paying for other options - and you probably won't have the minimum amount of money to start an annuity anyway. Spouses of those confined to a nursing home can usually protect some assets anyway. I know this is high heresy coming from an insurance agent - but there you go! Of course, you should consult with an attorney and do your own research. I'm just giving you another take on the situation - and actually I'm not the only one who has come to this conclusion.

If you do have assets, you will want to protect them for your spouse and children. If you have enough money to cosider a traditional annuity (5,000 - 10,000 minumus are common), the rider may be a good way to give yourself some 'self-insurance'.

If you have enough money to start a long term care annuity (36,000) you may have found the best of all possible worlds.

Otherwise, if you don't have enough free cash for an annuity, but can afford a monthly payment, regular long term care insurance with no savings feature may be an attractive option.

Good Luck, and I hope you never need to use long term care.