Long Term Care Insurance

by Wes Bridel on August 29, 2012

in Stewardship

The need for Long Term Care insurance in the United States has been and continues to grow rapidly.  The latest statistic we’ve seen is that 70% of people who make it to age 65 will need some form of long term care.  We’ve just begun a new series on insurance products that have been revamped in ways that will really grab your attention.  We’ll start with the subject that no one wants to think about, but look at ways to solve this problem that are much easier to swallow… before getting into the products that can save and grow your money better than risky options.

This could mean anything from having a nurse come to your house for a couple hours a day to moving to an assisted living facility or full scale nursing home.  Like anything, there are various levels of care that money can or can not buy.

Most people are totally unprepared for this cost.  What ends up happening is that the State takes possession of all of their assets and then provides the lowest level of care.  This is typically not how our clients wish to live out their last years.

To avoid this, many families do all they can to have a spouse or child take over responsibilities that they would have never wanted that loved one to perform had they took the time to plan ahead.

It’s cute to change your baby’s dirty diaper, it’s very, very sad for all involved to perform this same act for your mother or father.

This is a pressing need for all; Rich, Poor, & Everyone in between.  If you do not have a lot of assets, a long term care scenario could (as said above) take everything that you have and leave you living out your last days and years in a home that you would have never chosen for yourself.

If you have a lot of assets, your family could probably handle substantial long term care for a while.  But if you happen to have one of the conditions that drags on for years, this could wipe out everything you’ve built and leave your family very little of the legacy you had intended to leave them.

Fortunately, the market has responded with some fantastic solutions to this problem, but unfortunately, most have still not taken advantage of them.  We’ll first cover the qualifications for receiving Long Term Care Benefits and then cover some of the ways in which you can cover this risk with different types of long term care insurance benefits.

Long Term Care Qualifications

To receive Long Term Care insurance benefits when you have a policy in force which provides these benefits, you must meet one of the following two criteria:

1)       You must have lost the cognitive abilities to take care of yourself without harming yourself or others.  Dementia and Alzheimer’s are examples of this qualification.

2)      You must be unable to perform 2 of the 6 Activities of Daily Living (ADL’s).  These are:

  1. Toileting – Being able to go to the bathroom by yourself
  2. Continence – Being able to not go to the bathroom on yourself
  3. Eating – Being able to feed yourself
  4. Transferring – Being able to walk around from one place to another
  5. Bathing – Being able to bathe yourself
  6. Dressing – Being able to clothe yourself

The above are our definitions and you should obviously review the conditions set forth in your particular policy, however, these qualifications are pretty standard across the board, so the above should give you a good idea of how one qualifies for this benefit.

This is the 2nd post in our series of innovative new insurance products.  You can find the first few of this series at: 1) Innovative Insurance, 2) Long Term Care, & 3) Long Term Care Solutions.  If you’d like to read the entire series on insurance that we previously wrote, you can do so by reading Pt 1, Pt 2, Pt 3, Pt 4, Pt 5, Pt 6, Pt 7, Pt 8, Pt 9, Pt 10, Pt 11, Pt 12 and Pt 13.

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