Livens & Reed, PLLC

Key part of elderly planning could be long-term care insurance

The statistics for Texas and the rest of the country say that seven out of 10 people over age 65 will need some level of nursing home care at some point. It is an unfriendly topic, one that most would prefer to file away in that special drawer called "procrastination," but the economic figures are so foreboding that it is a topic that needs to be discussed. The fact is that paying for long-term care is such an expensive proposition that many people may be well-advised to consider long-term care insurance.

The harsh details are that nursing home costs generally range from $5,000 to $10,000 per month. That can come to at least $300,000 for an average stay. The bad news is that this tab is not covered by health insurance or Medicare. That is a big chunk of worry to digest at one time, at least for those who do not have ice water flowing through their veins.

For people who can afford long-term care insurance, it may be a wise move. Truth be told, this is not currently a popular method of solving the problem, probably because most people are simply struggling to stay afloat during their retirement years. Only about 8 percent of Americans have this kind of insurance, and most people do not even know that there is no other coverage available for nursing home care or in-home nursing care.

Fortunately, if a long-term care policy is purchased early enough in life, its cost can be tolerable, and its payout can ensure peace of mind during those relatively insecure last years when a massive money problem is the last thing that is needed. Thus, a healthy 55-year-old person would pay an average of $2,000 per year for a policy that would cover late-life nursing care. Many people do not buy such policies because they do not think they will use them. Consequently, some companies in Texas and other states are offering policies that will have a cash-in value at a later date, making these offerings attractive enough for adding to elder-planning framework.

Source: CBS Minnesota, "Is Long-Term Care Insurance Right For Your Family?", Esme Murphy, Feb. 24, 2015

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