Why You Should Consider Long Term Care Insurance in Your Retirement Planning

If you haven’t already done so, now is an excellent time to consider adding long term care insurance to your retirement portfolio. Because uninsured long term care expenses can pose a significant risk to the assets you’ve worked a lifetime to accumulate, long term care insurance should be considered as part of a complete financial plan.
 
As former Senator told the United States Senate Special Committee on Aging, “Although the need for health insurance to cover a patient’s medical expenses in case of catastrophic illness is widely recognized, few people are insured against the costs of providing long term support services for that same person. This lack of insurance coverage jeopardizes the financial security of families and diminishes the economic security of the country.”
 
The likelihood that you may need long term care is significant.  Some 70% of Americans who reach the age of 70 can expect to utilize some type of long-term care during the remainder of their lives.  And while long term care includes a broad range of services, from in-home care to nursing home care, each comes at a cost.  Those costs could be substantial, and could have a significant adverse effect on your retirement portfolio.
 
Why? Most forms of health insurance focus on medical expenses, not the custodial care and nonmedical expenses associated with long term care. Medicare only covers nursing home care after a related three-day inpatient hospital stay and even then for only 20 days before a daily co-payment is assessed and Medicare only covers a total of 100 days.

Medicaid doesn’t kick in until one has spent down a significant portion of their assets (spend-down to $2,000*).  Therefore, if either you or your spouse needs long term care, you may have to pay for that care out of your accumulated assets … unless you have long term care insurance.

genworth-nursing-cost-2016The average cost of a private room in a nursing home met or exceeded $80,000 annually.  If one partner needs such care, the cost could quickly and substantially erode the assets acquired over a lifetime.
 
Let’s use a hypothetical couple living off the interest of $500,000 of invested assets to illustrate how serious an impact long term care expenses could have.

For the sake of this discussion, assume the couples’ investments are earning approximately eight percent annually, generating about $40,000 per year in income.  Let’s also presume this couple needs all of this income to support them while they’re living together in their home.
 
Based on an $80,000 annual cost for nursing home care, it may appear that this couple has enough for a little more than six years of care. However, that basic calculation does not consider the living expenses of the spouse who remains in the community.  

If this couple is using all of their investment income to provide for their living expenses, they will soon need to start withdrawing from the principle for a portion of those living expenses as well as for the long term care expenses of the partner who needs care.
 
In circumstances like these, it’s easy to see how the assets accumulated over a lifetime could soon be completely exhausted.
 
Long term care insurance can help provide the funds to pay for the care you may need, while simultaneously protecting the assets you’ve worked a lifetime to accumulate. Long term care insurance may also help preserve financial independence, choice, and dignity, and those can be priceless.
 
It’s never too early to consider insurance because your health can change at any time, meaning you may be uninsurable and end up paying out-of-pocket.

The Partnership Asset Protection program is available in most states. This will protect your home and assets to the limit as was paid by a qualified policy.

Some people have too many assets to benefit from the Partnership. They may prefer an annuity or life insurance with a long term care rider. You can use an existing whole/universal life policy or existing annuity to fund a new policy with long term care coverage. The Pension Protection Act allows this transfer without having to pay capital gains.

Feel free to contact us for more information or for an updated quote.

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.* States can differ on spend-down.

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Caregivers At Risk.

It is not easy to talk about our parents or even ourselves getting older and some day needing help with very basic things. Here is information designed to educate the public about these issues.

Finding the words to begin a long term care conversation. (Genworth)

Beyond Dollars Infographic exposing the true costs of a long term care event. (pdf)

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LongTermCare.gov – Basic information about what is covered by Medicare and Medicaid.

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There are different ways to fund long term care: self-insure, long term care insurance*, life insurance or annuity with a long term care rider*, life insurance with a chronic illness rider*, Medicaid.
* Insurance is medical underwritten. Insuring locks in age and health.
27% of applicants ages 60-69 are declined because of health.

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A Solution for Caregiver Shortage: Robots

The government of Japan expects a shortage of 370,000 caregivers for the elderly by 2025, and is will look to robots to help provide care in institutions and at home.

Robots can transfer patients who are unable to move themselves from bed to a wheelchair, or to a bath, for example.

A new robot named Named RIBA (Robot for Interactive Body Assistance) has been developed by RIKEN and Tokai Rubber Industries (TRI). Using the latest sensor, control, information processing, mechanical and materials technology, it is the first of its kind in the world. So far, RIBA can safely lift and move a human patient of up to 61 kg (around 135 lb.).

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RIBA’s arms have high-precision tactile sensors and its human-like body has a soft exterior of urethane foam, for patient safety and comfort. Having robots do the lifting will ease the burden on staff, reduce injuries to health care workers, and help patients who want to live at home.

Another use of robot tech is a walking aid that can give a boost when the person is walking uphill and a braking action going down hills. The robot prevents falls and helps the user carry loads safely.

There are monitor systems that collect information aimed at improving nursing care services, and robots that can detect when a patient falls down or needs help. For example, robots are being developed that can predict when a person needs to go to the toilet and guide them there at the right time, helping them with removing clothing and other necessary motions.

In addition to their uses in nursing homes, robots can contribute to self-reliance for people who have some disabilities but want to remain at home.

The Japanese government wants patients to get used to robot helpers, hoping that by 2020, 80% of patients will accept having some of their care provided by robots. Several Japanese government agencies want to encourage businesses to develop care robots, and popularize them.

The RIKEN-TRI Collaborative Center for Human-Interactive Robot Research (RTC), where RIBA was developed, expects to bring care robots to market in the near future.

Priority Areas to Which Robot Technology is to be Introduced in Nursing Care – get information at METI.

For more information on long term care issues, see the Guide To Long Term Care,

 

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Insomnia increases Alzheimer’s risk

Just one night without enough sleep can cause harmful proteins to build up in the brain, increasing the risk of Alzheimer’s disease, according to a new study.

Past studies already linked insufficient sleep to increased risk of Alzheimer’s and other chronic diseases — but this recent study from Washington University,published in the Annals of Neurology, discovered what insomnia actually does to the brain.

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One of the functions of sleep is to clear the brain of waste, including amyloid beta proteins which can bond with each other and form plaques on nerve cells. These plaques build up in the brains of people with Alzheimer’s disease.

People with a genetic tendency for Alzheimer’s disease have higher than normal levels of beta amyloid proteins, even before they develop symptoms. After a night without sleep, these higher levels appeared in the healthy study participants.

Inadequate sleep has been linked to a 1.5 fold increase in the odds of developing Alzheimer’s. It’s not surprising, therefore, that research shows that sleep disorders such as sleep apnea increase the risk.

In the study, eight participants with no previous sleep or memory problems were instructed to either stay awake all night, get a normal night’s rest, or use the drug sodium oxybate to help them sleep. The sleep aid is supposed to increase the period of deep, dreamless sleep when the brain is thought to restore itself.

The scientists tested the cerebrospinal fluid surrounding each participant’s brain for amyloid proteins. Measurements were taken before the night of the test, and then every 2 hours the next day, to show how the night of sleep or no sleep affected the accumulation of these proteins in the brain.

Study participants who went without sleep for just one night had a 25-30% increase in the beta-amyloid proteins in their cerebrospinal fluid, bringing the levels to what researchers would expect to see in people who have genes for Alzheimer’s disease. Before the test, the participants all had normal levels. The pills designed to promote the deep sleep did not affect the levels of amyloid protein.

In a healthy person, normal sleep eliminates waste and restores the brain each night. But repeated nights of insufficient rest may overwhelm the brain’s recovery system, allowing amyloid proteins to build up and form plaques which interfere with the brain’s functioning.

For information on Alzheimer’s and also long term care insurance, see Alzheimer’s Section on the Guide To Long Term Care.

 

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After Disaster: New Emergency Requirements for Nursing Homes

During Hurricane Irma, 14 people died at The Rehabilitation Center at Hollywood Hills, Florida, due to a power outage that left residents in extreme heat. Lack of air conditioning made the building heat up like an oven. One of the victims died with a body temperature of 109.9 degrees. The nursing home’s owners now face criminal investigation and civil lawsuits.

In response to the tragedy, Florida Governor Rick Scott issued an emergency order requiring nursing homes to have generators that can run air conditioners.

The nursing home industry has brought court cases to challenge the emergency order. But in the meantime, state senators Lauren Book and Rene Garcia have filed bills to make the generator requirement a state law. Also, state senator Gary Farmer is preparing a more comprehensive Florida nursing home reform bill.

On the Federal level, U.S. Representative Debbie Wasserman Schultz is sponsoring a bill that will require nursing homes to have generators that can run air conditioning for at least 96 hours in the event of an emergency power outage. The bill will also put nursing homes on the top priority list, along with hospitals, for restoring power after a hurricane.

The Federal bill provides for loans to help small facilities comply with the new regulation. Homes that have fewer than 50 beds, or a private room monthly rate of $6,000 or less could qualify for a loan to get the generators and other required equipment. This bill also sets up higher fines for facilities that break the rules and adds nursing homes to the critical infrastructure list so power will be restored there first.

Nursing homes are among the most important resources for long term care. For more information about long term care insurance see the Guide To Long Term Care.

 

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Want to live longer? Take care of someone

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Seniors who take care of others live longer than those who do not.

This observation comes from an international research project in which scientists analyzed data from the Berlin Aging Study that followed 500 adults over the age of 69 from 1990 to 2009. About half of the subjects took care of friends, children, or grandchildren; these caregivers were still alive 10 years after their first interview in 1990.

For those who took care of non-family members, half were still alive seven years after the first interview. For those seniors who did not take care of anyone, 50 percent had died within four years of the first interview.

However, moderation in caregiving is essential. Other studies have shown that too much caregiving responsibility is stressful and can endanger one’s health.

Long term care insurance can help pay for needed care at home or in an institution. Some companies offer a cash benefit that can be used to pay a friend or family member for care. Get more information here: GuideToLongTermCare.com

 

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Nine lifestyle changes can reduce dementia risk

Nine factors that contribute to the risk of dementia

  • Mid-life hearing loss – responsible for 9% of the risk
  • Failing to complete secondary education – 8%
  • Smoking – 5%
  • Failing to seek early treatment for depression – 4%
  • Physical inactivity – 3%
  • Social isolation – 2%
  • High blood pressure – 2%
  • Obesity – 1%
  • Type 2 diabetes – 1%

These risk factors – which are described as potentially modifiable – add up to 35%. The other 65% of dementia risk is thought to be potentially non-modifiable.
READ  ARTICLE HERE

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Note: Insure before the diagnosis. Once diagnosed insurance is no longer available.

 

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