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Long-term Care Insurance Planning and Estate Preservation

The aging process brings wisdom and deeper appreciation for the beauties of the world around us. It may also present unique challenges and physical limitations that need special care and assistance with basic activities of daily living and the expense associated therewith. 

Proper planning will help you optimize financial solutions to assure such care at home, on your terms, with the familiar surroundings of family and friends. It will also help you avert one of the biggest financial threats to your retirement income and legacy plans because of Long-term Care expense. 

The "American Association for Long Term Care Insurance" provides a helpful guide for information and tips regarding Long-term Care planning and insurance protection.  Click here for three steps to smarter Long-term Care Planning.

Contact Us for a personal response to your questions. As an Independent Brokerage we will shop for the best solution and value for our clients. 

In helping to facilitate these objectives, Bishop Wealth Advisors represent a number of major carriers such as John Hancock, Mutual of Omaha, Prudential, American General, Genworth, Berkshire, Med-America and Transamerica. Since we are Independent Agents, we can secure contracting from other major carriers.            

In summary, we are able to tailor the Long-term Care coverage that will best meet the needs and circumstances of our clients. Click here for "A Shopper’s Guide to Long-term Care Insurance" sponsored by the National Association of Insurance Commissioners.

Non-Traditional Hybrid Long-term Care Insurance Solutions           

Additional solutions providing protection against the expenses of "custodial" or "Long-term Care" include non-traditional insurance products such as Whole Life, Universal Life and Annuities in combination with Long Term Care Insurance coverage as Riders. These solutions are best suited for individuals who do not want to risk the loss of traditional Long-term Care insurance premiums in the event there is no need for Long-term Care.       

We offer MoneyGuard Reserve from Lincoln Financial which is a combination Universal Life/Long-term Care product that guarantees either a return on the premium invested, or death benefit, if Long-term Care benefit payments are not needed. These products allow for dollar leveraging for a multiple of 2.5 to 3 times the original investment. For example, $100,000 will return up to $300,000 for Long-term care expenditure and those benefit payments from the policy are not taxable in most circumstances. 

We also sponsor a suite of products from The State Life Insurance Company, a OneAmerica Company. Please go to our "Long-term Care Expense Protection" page to review these solutions in detail. There you will find a complete explanation of their "Annuity Care" and "Asset Care" solutions which also provide for dollar leveraging and tax advantaged distribution of benefit payments.

What is Long-term Care?

When contemplating “Long-term Care” the first thought is generally care at a nursing home. In fact, any type of “custodial” care which may be given in our own homes, at an Assisted Living Facility, or Adult Day Care Center may qualify as “Long-term Care.” By definition, when an individual needs help with at least two “activities of daily living” (ADLs) they qualify for long-term care assistance. The six ADLs are bathing, toileting, eating, dressing, continence, and transporting, such as getting in or out of a chair or bed. Also,“cognitive impairment,” which may result from a stroke or disease, such as Alzheimer’s, may also qualify for Long-term Care Insurance benefit payments. The need for Long-term Care may also be due to physical limitations or disabilities resulting from injury in an accident.                                   

What are the Chances of You Needing Long-term Care?

Nearly 41% of Long-term Care is provided to people under the age of 65 who need help taking care of themselves after an accident or stroke, or as a result of chronic illness or debilitating disease. Seven in ten, or 70%, of all people who reach the age of 65 will require some Long-term Care services at some point in their lives. (Click here to review planning information:( www.longtermcare.gov ) The need for Long-term Care is a risk that all of us face with a potential for a very heavy toll emotionally and financially on the family. If you knew that you had a 70% chance of severe damage to your home would you fail to insure with homeowners insurance?

  • On average, someone who is 65 today will need some type of long-term care services for three years.
  • Women need care longer (on average 3.7 years) than men (on average 2.2 years), mostly because women usually live longer.
  • While about one-third of today’s 65-year-olds may never need long-term care services and supports, 20 percent will need care for longer than 5 years.

What is the Cost of Long-term Care?

Contrary to what many people believe, Medicare and private health insurance programs do not pay for the majority of Long-term Care services that most people need. Because of lack of understanding of the expense of Long-term Care many families incur the hardship of “spending down” a lifetime of savings to take care of a loved one.

It is very easy to incur expenses of well over $100,000 fairly quickly. Assistance with personal care such as dressing or using the bathroom independently may cost as much as $18-$21 per hour for a home health aide or homemaker services. With only 6 hours of home health aide per day the annual cost is over $40,000. Adult Day Care could costs $67 per day on average. Assisted Living Facilities run about $3,100 per month or $35,000 per year, while nursing homes run from $200 to $220 per day on average or about $76,000 per year. The average length of time for care for women is 3.7 years and 2.2 years for men.

How Do I Pay for Long-term Care?

Planning is essential for you to be able to get the care you might need while protecting your retirement nest egg and being able to leave something to your heirs. There are a number of options for paying for Long-term Care expenses including Long-term Care Insurance, Annuities and Universal Life polices with Long-term Care Riders, as well as Life or Viatical Settlements. We can explore and assist you with any of these options.

For a quote and no obligation evaluation of your options please Contact Us.

(Photos by Andrew Bishop)