THE NEED FOR LONG-TERM CARE INSURANCE (LTCI)

Why people buy long-term care insurance
It is a common belief that people buy LTCI only to protect their assets. That certainly is one reason. But the reason most commonly heard is that people do not want to be a burden to their family. There are also those people who want to control and maintain their independence. Others want to choose where they receive care and who will provide the care. Some people may have experienced a family member or friend spending all their hard-earned savings and then having to depend on the welfare system for their care. Basically, when a person plans for their long-term care needs, they have peace of mind.

Who should purchase long-term care insurance?
According to the United Seniors Health Council, a nonprofit consumer group, LTCI is appropriate if :

• You have $75,000 or more per person in assets (excluding home and car)
• You have a retirement income of at least $35,000 per person per year
• You can pay the premium without adversely affecting your lifestyle
• You could absorb up to a 30% increase in future premiums if necessary
• And it costs no more than 7% of your retired income

However, if you have little income and few assets, you may qualify for Medicaid. Right now, Medicaid pays 41% of all long-term care expenses. If, on the other hand, you have substantial assets and/or a good pension or annuity income, and are willing to spend those resources for long-term care, then you can self-insure the risk.

Most of us are somewhere in the middle. We either don’t have, or are unwilling to spend down, our savings for expensive long-term care. Thus, the question is not "should we get LTCI?", but rather, "what type of plan and what options to include so we are protected from a catastrophic expense, yet have affordable premiums now and in the future?"

Contact us for more information.