• Who would you like to have the wealth built over your lifetime – Your spouse, family or nursing home?
  • Do you want to preserve significant assets for your family legacy or charitable giving?
  • Do you want to ensure your spouse is well taken care of should you die first?

Long Term Care Insurance may be an important part of your overall financial and estate plans.

 If you are between the ages of 40 and 80, you need to think about long term care insurance. Especially if you have a family history of Alzheimer’s disease.

Medicaid will cover me is a common thought process of those approaching retirement. Medicaid requires full financial disclosure of assets and has many rules about transferring assets. While the eligibility requirements vary from state-to-state most allow individuals to retain $2,000 in assets and married couples $3,000. A spouse is allowed generally to keep half the combined assets, with a maximum of just over $99,000 in 2006. You are enabled to pay for burial expenses, debt insurances, etc.

Read between the lines on this one, if you or your parents have sizeable assets Medicaid will most likely not be an option. Medicaid was designed to help people with no money. Estate and insurance planning is where your focus needs to be.

If you have trouble falling asleep tonight read up on Medicaid.

U.S. Department of Health and Human Services states that approximately 70 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. Over 40 percent will need care in a nursing home for some period of time.

The U.S. Department of Health and Human Services calculated the average long-term care costs in 2008 were the following.  

  • $187/day for a semi-private room in a nursing home
  • $209/day for a private room in a nursing home
  • $3,008/month for care in an Assisted Living Facility (for a one-bedroom unit)
  • $29/hour for a Home Health Aide
  • $18/hour for a Homemaker services
  • $59/day for care in an Adult Day Health Care Center

Check out this page to see what the costs are in your area.

Using these numbers for a guideline it costs over $76,000 a year for a private room in a nursing home. If you live in a more expensive area of the country it could cost you upwards of $129,000 a year in New York City, $90,000 in Miami or $82,000 in San Diego. Running the math you can see that a $500,000 or $1 million portfolio can be eaten up very quickly.

Using $76,000 as the cost a $500,000 portfolio can be exhausted in just 6.5 years, while $1 million will be gone in 13 years. When you consider that both spouses may need care that isn’t very long. One of the first things individuals say is that Long Term Care Insurance is expensive. It is expensive if you look at the premium amount. Considering the cost of care carving out a small percentage of the portfolio to protect the remainder is a good idea.

Long Term Care Insurance comes in many flavors and options. I can take you through these; contact me today for brief phone meeting on Long Term Care Insurance.

Advisory Services offered through Axiom Advisors, LLC. A registered Investment Advisor Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer member FINRA/SIPC Axiom Advisors, LLC and Cambridge Investment Research, Inc. are not affiliated.