Dealing with Long-Term Care
Realizing that you or a loved one may ultimately
need the assistance of long-term care is
a difficult process to accept. Whether you
want to accept it or not, it is an important
issue and investing in long-term
care insurance may ultimately save you
thousand of dollars. This point is emphasized
in the staff-written article, “Long-Term
Care: Ya Gotta Deal With It –Now,”
which is located in the June 2006 newsletter,
Partners For Prosperity.
Before you start to think about
long-term care insurance, you should
familiarize yourself with some recent statistics.
According to a study, “Trends In The
Elderly Population,” conducted by
the American Geriatric Society,
most seniors (65 and older) living longer
now than ever before. “The actual
number of seniors grew from 3.1 million
in 1900 to 33.2 million in 1994. By the
year 2030, about one out of every five Americans,
or 20 percent of our population, will be
a senior citizen.”
Americans for Long-Term Care Security
reported that 20 percent of Americans
over the age of 50 will need the assistance
of long-term care within the next 12 months,
and Business Week stated that 60
percent of people over the age of 75 will
need long-term care for approximately three
years.
The average yearly cost for long-term care
varies depending on the institution and
the state where you reside. The U.S. average
yearly long-term care cost is $70,000 but
it is over $200,000 in Alaska.
The issue of Medicaid plays an important
factor in determining long-term care costs.
A February 9, 2006 Newsday article by Ellen
Yan notes that a recent change in Medicaid
eligibility states that having a home equity
of $500,000 or more will ban one from admission.
Once you determine that you are going to
purchase long-term care insurance, you must
decide when to do so.
“In general, premiums for long-term
care costs increase with age . . . if the
policy is obtained at a younger age, there
is also the possibility of paying premiums
for a longer period of time before the likely
onset of a long-term care situation- if
it occurs at all.”
There is a chance that people paying for
long-term care insurance can be paying a
premium for 20 to 30 years, and end up never
making a claim for it. “For example,
at an interest rate at 5 percent, a $3,000
annual premium paid for 30 years would be
worth over $200,000.
Then there is always the tax issued to be
considered. Different states have different
laws concerning long-term care tax deduction.
Tax increase is an issue as well. Most long-term
care insurances will have a fixed interest
for the first 10 years, but are subject
to change after that.
You want to make the right decision when
it comes to thinking about your long-term
care. But what is the right decision?
This is not accidental
life insurance. Your best option is
to take your time and evaluate
your health and financial situation
before making a decision.
