Some of the lowest rates of heart and brain disease ever reported by science are found among Indigenous communities inhabiting the tropical forests of lowland Bolivia.
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I am often asked if a long term care insurance policy would pay for a family member to provide care. The only way is to have a cash benefit policy rather than a reimbursement benefit policy.
There are two cash benefit policies:
1. Traditional long term care insurance.
Some companies offer a percentage of the benefit available in cash. An example is one company provides 25% of your home care benefit, a $4000 month home care benefit would pay $1000 in cash in lieu of reimbursement. Many policies provide Medicaid asset protection with Partnership.
2. Life insurance with long term care benefits.
Some pay a certain amount of cash per month and some send a single benefit payment for the year. If the policy is not used for care the beneficiary receives the death benefit.
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NOTE: The #1 criteria for being able to purchase either policy is health. According to AALTCI claims data for applicants ages 50-59 21% are declined because of health, those 60-69 27% are declined, ages 70-79 45% are declined.
Not only is it cheaper to insure when young, there is no guarantee you will health qualify tomorrow.
Contact me for quotes for long term care insurance or for life insurance with long term care benefits.
Approximately 70% of older adults will need some type of long-term care at some point. This type of care could include a nursing home or various degrees of in-home care, whether that includes skilled nursing care, help with activities of daily living, or some combination of services.
The problem is that long-term care services are expensive-and the costs are not covered by Medicare, outside of a 100-day period where skilled nursing care is covered for those who qualify and which does not cover non-medical care.
Medicaid does cover some costs of long-term care, but the income requirements to qualify for Medicaid assistance are very strict. It is not uncommon for older adults to spend everything they have on their care in order to qualify, so that by the time they do, they are near destitution.
This can be prevented with an LTC insurance policy. But these policies come with challenges of their own-and not everyone is a good candidate. Here is an overview of when you should – and shouldn’t – consider long-term care insurance.
If you have assets to protect.
If you have significant assets-such as a valuable home or savings account-that you want to protect and leave to your family, you may want to buy LTC insurance. If you can afford it, this type of insurance will cover your long-term care without requiring that you “spend down” to meet strict income requirements. Most states approved a Partnership asset protection exemption from Medicaid spend-down for certain long-term care insurance policies. https://partnershipforlongtermcare.com/
If you have a health problems that suggests you may need care.
If you have a history of health problems in your family that typically need this type of care, however-such as dementia, diabetes, or cardiovascular disease-you may be more likely to need it yourself.
If you have no family members to rely on.
If you have no close family members who could care for you, then buying long-term care insurance may be a better bet. That being said, it is possible that even if you have a family member ready and willing to care for you, he or she will not be able to provide the type of care you need as your situation progresses-or your future caretaker’s financial or job situation will change and make caring for you less of an option.
Because of the expense, making the decision to buy long-term care insurance is never easy. But for many seniors, it can be crucial. Do some research on your options, and hopefully you’ll be able to make the best decision for your situation. https://guidetolongtermcare.com/
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A lot of people incorrectly assume that health insurance and Medicare will cover long term care. They cover medically necessary care for up to 100 days, or until you stop improving or stablize. After that, you’re on your own.
The majority of Americans over 60 do not have long term care insurance yet 70% will need care. So, why do people not buy insurance?
Most will say the cost of the policy. An average policy, depending on age, health and benefits chosen, will cost $1,000-$3,000 per year per person.
But what about the fact that the same people who say they will “self-insure” for long term care will never “self-insure” a parking meter… they always put money in the meter, even though they could easily afford and “self-insure” the parking fine.
We make decisions based mostly on emotion. That’s what causes people to buy stocks when they are high and sell when it crashes, the opposite of what seasoned investors do.
What if you “self-insure” for long term care, how much will it cost you? The national average for nursing home care is $89,000/year with some areas over $140,000/year. Home care and assisted living average $50,000/year. See how much care cost in your state: download the Cost of Care brochure.
For every $1,000 of monthly retirement income you want to generate from your own savings, you will need about $230,000 in assets, according to the Schwab Center for Investment Research. For example, if you want only $3,000 a month, or $36,000 a year, you would need savings of $690,000. That’s a conservative estimate, assuming that you earn 5.2% on your investments and live off the earnings without dipping into the principal.
If you cannot afford a long term care insurance policy, how are you going to afford paying out of pocket? The other option is spending all your cash for your care. This includes anything of cash value: savings, investments like stocks, bonds, life insurance, annuities. Medicaid allows you can keep only $2,000.
There are 30 states with filial laws that allow the state to make your children repay Medicaid for your care expenses, although this is rarely done. Fifteen years ago the #1 reason people bought long term care insurance was they did not want to be a burden on their family. Today, the #1 reason is people do not want to outlive their money (and end up on Medicaid-Welfare Health Care).
Some people will buy long term care insurance for asset protection. Most states have a Partnership program that will protect assets from Medicaid if you own a Partnership long term care insurance policy.
You have five options to pay for long term care:
1. Self-insure.
2. Long term care insurance and Partnership.
3. Life insurance with long term care rider.
4. Annuity with long term care rider.
5. Medicaid.
The life insurance and annuity do not qualify for the Partnership (neither do group LTC policies). The life/LTC or annuity/LTC are often bought because: the person’s health will not qualify for traditional LTC insurance, or the person has too many cash assets and they’d never spend down to qualify for Medicaid. An old life policy or old annuity can be converted to one with long term care benefits without paying capital gains.
You can continue down the same road, uninsured, until either a diagnosis or a serious change of health, like a stroke, will disqualify you from insuring. Then you will only qualify for state assistance. At that point you would have to have used, sold or given away your assets 5 years before applying for Medicaid. Who has the ability to see 5 years into the future?
* The best age to insure: the age your health will still insure you.
* The best benefits to get: enough to cover what you cannot afford to pay out of pocket.
For updated quotes and more information visit: https://guidetolongtermcare.com
Filial responsibility laws date back to 17th century English law requiring children to financially support their parents when they couldn’t support themselves.
Because of age, or maybe an illness like Alzheimer’s, millions of Americans are no longer able to take care of themselves.
Spending one’s own money for care can wipe out a life’s savings in a short time. It could be someone in your family.
What happens when the money runs out? Out of love, you may feel a moral obligation to help. In some states, however, you may be legally responsible for paying your parents’ long-term care.
In these days of economic uncertainty it is essential that people have a sense of security in terms of their future. Long term care insurance is a way to preserve that.
Like car insurance, the prices for long term care insurance will vary by company. The premium will depend on your age, health and the benefits you want.
The LTC Partnership Program provides asset protection in most states.
Since care cost differs by type and location it is important to get the right information to make an informed decision.
Other than transferring your assets to an irrevocable trust five years before you apply for Medicaid, the only way to protect your estate from Medicaid is with a Partnership long term care policy.
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As we begin the caregiving journey, we are mainly concerned about our aging parents’ well-being and safety. This can be a difficult time psychologically for adult children as they watch their parents, once vital and in charge, become frail and in need of help. In the rush to deal with day-to-day problems and scramble to figure out what to do if Mom or Dad is having difficulty at home or has a serious health crisis, the financial ramifications are often an afterthought.
However, sooner or later, finances will become a key part of the mix, whether we end up paying for incidentals, managing or coordinating parents’ finances, or paying outright for their care. It is not unusual for family caregivers to take on all three financial roles. A recent study finds that 92% of caregivers are “financial caregivers” along with more traditional caregiving responsibilities. Often people aren’t aware of what they are spending or how much time they devote to helping out with paperwork until they are deep into their caregiving responsibilities.
Paying out-of-pocket expenses
Whether aging parents or other loved ones are well off financially or not, family caregivers usually don’t think twice about picking up groceries, items from the drug store or medical supplies. And if they live in a different location from their parent, they are quick to get in their car or fly to a destination if a crisis occurs or simply to make sure things are okay.
Expenses for gas, airfare and all the incidentals can really add up. Caregivers spend an average of $6,954 yearly for out of pocket expenses, and for long-distance caregivers, the cost is nearly doubled. On average, those who care for someone who lives far away spends $11,923 per year. These expenses are generally unbudgeted and can take an unbudgeted bite into a family’s savings.
Coordinating and managing finances
It’s not unusual for someone who needs care or has a serious visual impairment to be overwhelmed by the paperwork generated from Medicare, insurance, utilities, and savings and checking accounts. Even if a parent has a financial professional, the day to day work involved of making sure bills are paid, taxes filed, accounts monitored, and insurance premiums and claims under control is part of this responsibility. Keeping track of legal documents such as powers of attorney, living wills and other safeguards also needs to be managed by someone. And that someone is usually a family caregiver.
Taking on this role has some pitfalls as parents are often reluctant to turn over anything related to money to their children. But it is an important role, because it enables the caregiver to make sure that the bills don’t stack up and that there are no suspicious expenditures. The annual loss to victims of financial elder fraud and abuse is estimated to be $3 billion a year; some estimate it could be as high as $36 Billion as four out of five incidents go unreported.
Whether fraud is an issue or not, financial caregivers find themselves spending many hours coordinating finances and making sure that their parent’s money is safe and secure.
Paying for care
As financial caregiving escalates and care needs increase, caregivers may need to confront a harsh reality. They may find that their parents don’t have enough money saved to afford paid care, whether at home, in an assisted living facility or nursing home, and do not have long-term care insurance protection. It’s also possible that assets have dwindled after one of their parents had to spend down savings to pay for the other spouses’ care.
The cost of care increases each year. The average rate for paid home care is now at $22 per hour and assisted living at $3.750 (base rate) per month. Studies indicate that about half of adult children feel an obligation to pay for their parents’ care should they need it. But families are often struggling with their own finances, worried about college tuition payments, mortgages, possible job loss and their need to save for their own retirement.
Transferring parents’ assets to a daughter or son, once considered a viable option, is risky and not always foolproof. Most states have look back periods, and thirty of them now have Filial Responsibility laws on the books requiring adult children to repay for the cost of care incurred by the government. While rarely enforced, a few lawsuits are currently pending. With state budgetary shortfalls in the news, it’s likely that these laws will have more teeth in the future.
Lost lifetime wealth
An alternative to paying for care directly is to ask a parent to move in, or as another option, to assume the caregiver role. For those who do the math, it may seem logical at first to leave the workforce altogether or step back to part time and become the primary caregiver. Paying for round-the-clock care is costly. Even if parents have money, the stress and emotions of providing care may drive a caregiver to stop working. Women, in particular, who take on intense caregiving roles, are more inclined to see this as an option and decide to cut ties with employment.
However, more sophisticated calculations show that a workforce departure or step-back can result in a significant blow to long-term retirement finances. For men, the loss of wages and benefits over a lifetime amounts to $284,000. It’s even worse for women at $324,000. People who do drop out often don’t think of the subtle ramifications in addition to the missed years of earnings and income growth. They forget about the 401 (k) match, the value of employee benefits, the career trajectory, and the roadblocks they might find when they try to get back into the workforce at the same salary level. Actually, continued employment might be the best thing to do, not only to maintain financial health but also for physical and mental health as well. Caregivers often say that work helps them take a break from the intensity and emotions of caregiving.
So what is a potential strategy?
Both the family and the financial professional can take the initiative and make a difference by confronting the issue of financing care early, before it is too late. A conversation with family members and with an advisor about care planning—who will provide care, where will care be delivered and how will it be paid for—is a very important step. It’s often forgotten or put off. Another topic of discussion with an advisor is what long term care protection options are available, not only to find out whether parents might be eligible but also as a planning tool for the adult children themselves. Financing the quality care that we all want and helping our families cope when they assume caregiving roles should be top of mind and incorporated into any discussion of long-term care.
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People with dementia showed positive changes in mood and behavior after listening to music, according to a study from researchers at George Mason University.
A documentary titled “Alive Inside” showed individuals with moderate to late stage dementia listening to personalized music with headphones. The listeners often sang along and became more talkative, showing a great improvement in mood, and decreased agitation.
The study involved 51 adults with dementia. An individualized playlist was developed for each participant. Study researchers recorded both within-person differences and between-group differences.
Behavioral observations showed increases in joy, eye contact and movement, communicating and talking. There was less restless moving, agitation, and sleeping. Participants smiled more, and were more alert and relaxed. Sometimes they recognized the music, sang, and followed the rhythm.
Music listening can be especially beneficial when the music is connected to positive memories for the listener. The music can be used in a variety of care situations, including at home. Music can be helpful to happily occupy a dementia sufferer when a caregiver needs to attend to other duties.
The study showed that music listening is a low cost, nonpharmacological intervention that can bring positive results for people with dementia.
Be Prepared: Long Term Care Insurance Quotes – You must insure before the diagnosis.
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Scientists are working on a vaccine to delay or reduce Alzheimer’s disease. Researchers say they are close to testing the vaccine on humans.
In spite of all the research and money spent, no reliable Alzheimer’s treatments are available yet. But researchers believe they may be able to cut down the number of Alzheimer’s sufferers half.
At the University of Texas Southwestern Medical Center, a team of scientists has developed an experimental vaccine that is designed to reduce two proteins in the brain, beta-amyloid and tau, that are associated with Alzheimer’s Disease. Buildup of these proteins prevents the brain from functioning normally. In mice, the vaccine reduces beta-amyloid protein by up to 40 percent and tau by up to 50 percent.
If the vaccine has the same effect on humans, it could delay the onset of Alzheimer’s by five years, or cut in half the number of people affected.
The main problem with animal studies is that human diseases and immune systems don’t always work the same way. Another problem is that proteins can build up in the brain for 20 years before a patient will have symptoms. So patients would have to agree to taking the vaccine long before they know if they are susceptible to the disease. At this time, tests that show who is at risk for Alzheimer’s are expensive.
The vaccine may be tested for safety on monkeys before trying it on humans, so it will probably be 10 years or more before it is available.
At this time, around 5 million Americans have Alzheimer’s disease. The Centers for Disease Control and Prevention estimate that by 2060 there will 14 million. The National Institute of Health will spend 2.3 billion on Alzheimer’s research this year.
Read more about Alzheimer’s and Dementia: Link
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The Heart Age Test:
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Plan your future: Get Long Term Care Insurance Quotes
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Guide to Long-Term Care blog 