Showing posts with label long term care insurance. Show all posts
Showing posts with label long term care insurance. Show all posts

Wednesday, May 15, 2013

Alternatives to Long Term Care Insurance

As mentioned in my last post, "Will You Qualify for Long Term Care Insurance?" more than half of Baby Boomers and older retirees will not qualify for Long Term Care Insurance.  What will happen to them when they become old and frail?

When my husband and I purchased our LTC insurance, our broker told us that I needed more insurance than my husband because I was likely to out-live him.  He said that in the case of a couple, one spouse will often care for the other right up until the time of death.  Many debilitating diseases can be treated at home, as long as there is a willing caregiver who is able to handle this.  Because of this, the first spouse to become ill may not even need LTC insurance, or may only need it for a relatively short time.  We purchased a policy that would provide care for my husband for four years, while we purchased life-time care for me, beginning 90 days from the time I go into a nursing home or need at-home assistance.  (Medicare pays for the first 90 days of care.)

However, what if you are single or widowed and you do not have long-term care insurance?  What if you are married, but you become too old or frail yourself to physically care for an ill spouse?  What if your ill spouse needs more care than you are able to give?  In these situations, you need to know about your options.

Alternatives to LTC Insurance

According to InsuranceNewsNet, people who have liquid assets that exceed $1.5 million could self-insure themselves.  People with adequate assets should be able to personally cover the cost of either a home healthcare aide or a nursing home, should one become necessary.

At the other extreme, people who have very few assets may also want to self-insure.  Currently, a person who collects less than $30,000 a year in individual Social Security benefits is eligible for Medi-Cal, as long as they do not have very many assets.  In this situation, Medi-Cal will cover the cost of a semi-private room in certain nursing homes, or homecare with community based services.  Medi-Cal also protects a spouse from becoming completely impoverished if the other spouse needs to go into a nursing facility or similar medical institution.  However, there are limits on income, assets and home equity and the numbers are changed from time to time.  You can get more information about current eligibility requirement and benefits in this overview of the Medi-Cal program.

For those who cannot afford to self-insure and do not think they will qualify for Medi-Cal, there are a few other alternatives to traditional long-term care insurance.  The particular option that will work for you depends on whether the reason you cannot obtain a policy is because you cannot afford one or because you cannot get the approval of medical underwriters.

What If You Cannot Afford LTC Insurance?

If your income falls in the middle between being wealthy or low-income, you may wish to try one of these other solutions to help cover the expense if you or your spouse needs long term care.

One approach that may be more affordable than traditional LTC insurance is to purchase a special combo policy that combines both life insurance and LTCI.  With these combo policies, you will get a lower return on the cash value of your life insurance and your death benefit may be cut if you use too much of the LTC benefits.  In addition, you still need medical approval.  Therefore, you can be denied this policy, just like you can be denied a traditional LTC policy.  However, for those who do qualify medically but may be concerned about the cost, this may be a less expensive alternative.  Basically, it gives you the opportunity to take an advance on your life insurance in order to pay for your long-term care.

Your insurance broker may also be able to help you with similar options such as a long-term care rider on your current life insurance policy.   Discuss both of these options with your insurance broker to see if this is an affordable, practical option for you.

What If You Cannot Pass the LTCI Medical Exam?

As mentioned in my previous article, more than half of Americans age 50 and older will not be able to qualify to buy this insurance because they cannot pass the strict medical standards.  This is especially worrisome for these people because those who have a serious medical problem are also the same people who are likely to eventually need care, either in their personal residence or in a nursing home.

One option they have is to purchase an annuity with a long-term care rider.  These riders do not require a medical underwriting, but you need to wait five to seven years until the LTC benefit is available.  In addition, you have to have enough assets to pay for them in advance.  Many annuities can require an upfront premium of $50,000.  You should also know that the benefits are only for a limited time.  However, if you believe this would be helpful to you, contact an investment professional who specializes in annuities. 

Another similar choice is to purchase a medically underwritten immediate annuity which can provide you with a lifetime income stream.  With this type of annuity, your income stream may actually increase if you show that you have coronary artery disease or some other serious illness that is likely to shorten your life.  The reason for this is because the insurance underwriters are betting that your disease will reduce the number of annuity payments they will need to make, therefore each payment can be a bit larger.  This may sound grim, but the truth is that there are actuaries who work for the annuity companies and they base the estimated return on your investment on how long they expect you to live. For people who need to dramatically increase their retirement income in order to cover long-term care, this type of policy can be a helpful solution.  Again, talk to your investment professional and find out what types of annuities they offer.  Discuss with them whether you should put your money in this type of annuity now or wait until you are seriously ill and need the extra income.  If they recommend that you wait until you need this annuity, make sure you put aside the money in a safe account, so that you have it when you need it.

Whether you decide to self-insure your long-term care, rely on Medi-Cal,  purchase a LTC insurance rider on a life insurance policy, or buy an annuity that will cover your future medical expenses, will depend on your personal situation.  You should not make a decision on this without consulting your financial planner, investment professional and insurance broker.  Whatever option you decide is best for you, the purpose of this post is to let you know that you do have options.  Even if you do not qualify for traditional Long Term Care Insurance, you are not helpless.  You can still make a plan regarding the way you will pay for your personal care during the last few years of your life.  It provides peace of mind just knowing what you will do when the time comes, so you do not have to make decisions when you are already in need of help.

Don't Forget About Your Veterans Benefits

Approximately one in three Americans are also eligible to receive some aid from the Veteran's Administration.  There are some specific guidelines to qualify so you may want to read my article:  "Are You Eligible for VA Long Term Care Benefits?"  You may be surprised to find that you qualify, especially if you or your spouse served in the military and a war was going on during that period of time ... even for just ONE day.  The veteran did not have to serve in the war zone, just be in the military at that time.  The application process is complicated and they initially deny benefits to most applicants.  Don't give up!  Get help from an organization like the American Legion or Veterans of Foreign Wars.  You may also be able to hire a consultant to help you.  The effort is well worth it!

Find additional information about your options at:

If you are looking for more information to help you with your financial and retirement planning, use the tabs or pull down menu at the top of the page. You will find links to hundreds of articles on medical issues, financial issues, places to retire and more.

You are reading from the blog:

Photo of elderly couple courtesy of

Sunday, May 12, 2013

Will You Qualify for Long Term Care Insurance?

A few years ago, when I was in my late 50's and my husband was in his early 60's, we were fortunate enough to be able to purchase Long Term Care Insurance for both of us.  Even though we were healthy at the time, it was still not easy to obtain.  The first company where we applied accepted me, but not my husband.  Disappointed, we consulted with an insurance broker and, on our second attempt, we were both accepted.

Most people are somewhere between the ages of 50 and 75 before they realize that owning LTC insurance could be beneficial.  By that time, it may be too late for many of them to be accepted.  According to the American Association for Long-Term Care Insurance, only about 51% of applicants qualify in their 50's, 42% in their 60's, and 24% in their 70's.  This means that far fewer than half of all people over the age of 50 would be accepted if they applied. If you have tried to get LTC insurance in the past and been turned down, you are definitely not alone.

In fact, the website for this organization has a list of conditions that they say will make it nearly impossible for you to qualify for this insurance.  They are pretty blunt on their site.  They tell you not to even bother to fill out an application if you currently use a walker, wheelchair, crutches, a multi-pronged cane, or need oxygen.

That's just the beginning.  They also say that "it generally won't pay to take the time to request a quote" if you already require assistance with dressing, bathing, feeding or other areas of daily care, including help with grocery shopping, the use of a telephone or the use of transportation. (I wonder if getting confused by a "smartphone" would disqualify someone from LTC insurance?  Better not mention it!)

In addition, they also tell you not to fill out the form if you have a history of certain illnesses.

Illnesses That Automatically Disqualify You for LTC Insurance

Alzheimer's or other types of dementia or memory loss
Cystic Fibrosis
Kidney Failure
Cirrhosis of the Liver
Multiple Sclerosis
Muscular Dystrophy
Post-Polio Syndrome
Sickle Cell Anemia
Systemic Lupus Erythematosus

At the end of this list of illnesses they also say on their site, "If you are not insurable, then we are truly sorry."  Of course, this is small consolation for the more than 50 percent of Baby Boomers who do not qualify for this insurance.

If you do not have any of the illnesses or health problems listed above, it is highly recommended by most retirement planners that you purchase the insurance at the earliest possible time, while you are young enough and healthy enough to qualify, and while you can still get the lowest possible premium.

Other Health Conditions That May Disqualify You

On the other hand, just because you do not have one of the health conditions that was listed above, you are not guaranteed to be accepted.  I have also known people who had problems obtaining LTC insurance because they had diabetes, a history of heart problems, or because they had been treated for cancer.  Since these illnesses are not specifically mentioned on the above list, it may be that each carrier of LTC insurance has difference standards regarding these health issues.  In addition, it may also depend on other factors, such as how long ago the cancer was treated, or the severity of the cardiac problems.

Best Time to Buy LTC Insurance   

The ideal time to purchase LTC insurance is when you are young and healthy, before you have been diagnosed with a serious disease.  However, how many healthy young adults in their 20's, 30's and 40's are thinking about how they will pay for their nursing home or personal care when they become old and frail?  Unfortunately, very few think about it.

In my next post, "Alternatives to Long Term Care Insurance," we will discuss some of the options that are available for people who become incapacitated in their later years and do not have LTC Insurance.

If you are interested in reading more about planning for your retirement years, you may want to look through the index articles listed below.  Each one contains some general information plus links to a number of articles on that topic:

Gifts, Travel and Family Relationships

Great Places for Boomers to Retire Overseas

Great Places to Retire in the United States

Health and Medical Topics for Baby Boomers

Money and Financial Planning for Baby Boomers

You are reading from the blog:

Photo of elderly man courtesy of


Thursday, November 8, 2012

How to Plan for Long Term Medical Care

As we Baby Boomers begin to age, sooner or later two out of three of us are likely to need Long Term Medical Care.  Approximately one of five will need that care for more than five years!  If you are married, the odds are extremely high that either you or your spouse will need assisted living or a nursing home in the coming years.

Long Term Care is Expensive

Unfortunately, the cost of these services is quite high.  For example, according to an article in The Wall Street Journal dated October 27, 2012 and entitled "The Cost of Living Longer," the average basic cost for assisted living in the United States ranges from $2751 to $4807 a month, depending on the number of services needed. In addition to the basic cost, however, patients should plan on paying about $347 for medication management, $236 for dressing assistance, $181 for bathing assistance and $504 for other personal care each month. That means the total cost of total care is approximately $4000 to $6000 a month. The cost of this has gone up about 2 to 4 percent every year since 2012.

It is easy to see that the cost of these services will quickly sky-rocket out of reach for most families.  Fortunately, there are steps we can all take now to make sure our future care is more affordable and less stressful for our other family members.

Buy Long Term Care Insurance

While you are still in your 50's or early 60's, look into the cost of purchasing Long Term Care Insurance from a reputable company like Genworth, one of the country's largest providers of this insurance coverage.  My husband and I purchased this insurance about five years ago, and we are glad we did.  The younger you are when you purchase Long Term Care Insurance, the less you will have to pay in premiums.

However, although this insurance will bring you peace of mind, it only helps if you are able to qualify for it and afford it.  If you wait until you have a serious medical problem you will not be approved or the premiums may be too high.  In those cases, you should look at the other money saving options that may be available to you, and let your family members know your preferences.  Here are some possibilities.

Long Term Benefits from the Department of Veterans Affairs

A war veteran or their spouse may each receive as much as $2020 a month in benefits from the Department of Veterans Affairs to help pay for the cost of assisted living or nursing home care.  When combined with your other retirement benefits, this may be enough to cover the cost of your long-term care. The veteran only needs to have served in the military for at least one day during a war ... including the wars in Vietnam, Korea, etc.  They do not need to have served in a war zone while the war was going on.

If you think you may qualify, you can get more information and help with your application by going to  Then click on "Locations" - "State Veterans Affairs Offices" - "Veterans Service Organizations" or "Regional Benefits Offices."  Unfortunately, I have been told that at many as 60 percent of claims are denied the first time you apply.  If you are denied, you may want to get help with the application from a service organization such as Veterans of Foreign Wars.  Do NOT give up.  You are entitled to these benefits.

Medicaid Long Term Care for Low and Moderate Income Individuals

Many people confuse Medicaid and Medicare.  However, they are different government programs.

Medicare will only pay for the first 100 days of nursing home care.  After that, you are on your own if you have assets and a moderate to high income.

However, Medicaid will pay for most long-term care for low-income and many moderate income people, especially those with very few assets.  In the case of a couple, the spouse who does not need care is allowed to keep some assets, a home and, possibly, a business ... although they may be expected to contribute to the care of the spouse who is in the assisted living facility.

If you believe that you may qualify for Medicaid, you or your family members should apply as soon as you go into a nursing facility for care that is being covered by Medicare.  The people in the facility can help you with your application.  There are also private companies, such as Nursing Home Solutions and A Place for Mom, which can help you with the application and find an assisted living situation, if you qualify. In California, Medicaid is called MediCal.

Independent Living Apartments instead of Assisted Living

Assisted Living can be very expensive and many people do not need that level of care.  As an alternative, some people are moving into independent living apartments that provide local transportation, meals, exercise classes and other services.  Then the family can hire a caregiver who only comes in a couple of times a week or a few hours a day to provide other essential services, such as help with medication, bathing, getting dressed, etc.

To help you compare the cost of home healthcare in your community, use Medicare's Home Healthcare tool at

This choice is very common, for example, in the senior community where I live, Laguna Woods Village. In fact, it is common in most independent living retirement villages. In our community, many seniors stay in a typical condo or move to a high rise within the community known as Rossmoor Towers.  For about $2300 to $2800 a month, an individual or couple in the Towers has a private apartment with a full dinner provided every evening, and weekly housekeeping.  Each condo has a kitchen where the residents or their caregivers can prepare their own breakfast and lunch.  Many of the residents of the Towers share caregivers with their neighbors.  The caregivers arrive in the morning and help different residents with their meals, medications, bathing, dressing, etc.  Even with the additional cost of the caregiver, this arrangement makes it possible for a couple to stay together in their own private residence, even if one of them needs assistance with daily living.  The Towers are also far less expensive than the surrounding skilled nursing facilities.

Home Health Care - Age in Place

Similar to moving to the Towers, some people simply choose to remain in their own home and hire a caregiver to come to their home each day and provide the necessary assistance.  Whether or not this saves money depends on the cost of living in the current residence.  This may not be feasible for someone who lives in an expensive home with a large mortgage or for someone who will need a lot of personal assistance plus the cost of a housekeeper, landscape workers, etc.  However, it has become a popular and affordable option for many people.

Adult Day Services and Respite Care for Those Getting Care at Home

Another alternative is for the person who needs assistance to live with an adult child or other family member.  This can be stressful for the family members who are placed in the role of caretaker.  Consequently, being able to take an elderly person with dementia or other medical problems to adult day care makes it possible for the full time caregiver to work, run errands or just have a break each day.

Whether you use adult day care services or not, you may also occasionally need respite care. It is available in many areas.  Respite care is provided by many assisted living facilities to enable relatives to leave an older adult in their facility for a few days so that their family members can leave town or deal with a family emergency without worry.

Inform Your Adult Children or Other Relatives of Your Preferences

Once you decide on the type of care that you would like to receive when you are older, it is important that you inform your spouse, adult children or other relatives of your desires.  If you have purchased Long Term Care Insurance, give a copy of your policy to your nearest relative in case you are incapacitated.  If you know of independent living apartments that appeal to you or where you already have friends, inform your relatives of your selection.  If you would like to continue to live in your home as long as possible, others will need to know this, as well.  Finally, if you hope to live with your adult children or other relatives, you should discuss this possibility with them long before you become disabled.

If you would like additional information about where to retire, common medical issues as we age, changing family relationships or financial planning, use the tabs or pull down menu at the top of the page to find links to hundreds of additional articles.

You may also be interested in reading:

Healing Relationships with Your Adult Children
Patient Safety in the Hospital Near You
Laguna Woods Village Active Adult Community
Garden Spot Village Community for Seniors in PA

You are reading from the blog:

Photo of private room in medical facility courtesy of

Sunday, October 7, 2012

Is it Time to Retire?

One of the reasons that the unemployment rate has fallen over the past few years, after hovering over 8% between 2007 and 20011, is because thousands of Baby Boomers are beginning to retire.  Over the past few years, Baby Boomers have been turning 65 at the rate of 10,000 per day, but many of them were reluctant to let go of their jobs in the middle of the 2007 recession. 

In many cases, Boomers needed to recoup what they had lost in the real estate and stock market crashes of a few years ago before they could retire.  In other instances, they were afraid to let go of their jobs too soon for fear of another financial set-back.  Over the past few years, however, Baby Boomers began to believe that it was possible for them to retire. 

If you are uncertain whether you are prepared to give up your job in the next few years, listed below are some things to consider.

How to Decide if You are Ready to Retire

Make a Realistic Post-Retirement Budget

The first thing you need to do is make a list of the expenses you have now.  Remove the items that you do not expect to have after you retire, such as commuting costs.  Add in money for the extra expenses you expect after retirement including travel, replacing your car, Medicare insurance premiums, prescription drugs and medical co-payments.  Next, add up the retirement income that you expect to receive from your Social Security, your spouses's Social Security, pensions, annuities and any other sources.  Will you have enough income to cover your expenses, or do you need to make some adjustments?

Consider Ways to Supplement Your Retirement Income

In the retirement community where my husband and I live, hundreds of retirees work part-time for the homeowner's association.  They serve as Gate Ambassadors, bus drivers, receptionists, and office workers.  They are paid several dollars an hour above the minimum wage and are also allowed the free use of some of the pay-for-use facilities in our community. 

Other people in our neighborhood earn extra money selling real estate in the community, working in antique stores and gift shops in the area, and in similar part-time occupations.  A few of our friends have remained in their former occupations, but now only work part-time.  These jobs help retirees stretch their retirement income without the necessity of continuing to work full-time in a demanding career.

Pay Off Debts

If your income will not be enough to cover your post-retirement living expenses, one step you should take is to make a plan to pay off your debts.  If you have credit card payments, car payments, and college loan payments for your children, you may need to pay off these bills before you can realistically retire.  If you have a small mortgage with a low payment, this is one debt you may be able to continue to carry, if you are free of other large expenses.  However, if you are overwhelmed by debt and feel as if you can never retire, you may consider selling assets to free up enough money to clear out your obligations.  If your debts are excessively large, you may even consider selling your current home and buying a smaller, less expensive one.  Your goal is to rearrange your expenses so that it is possible to have a planned, manageable  retirement, before a healthcare crisis or job loss forces you to retire unexpectedly.

Have a Plan for Long Term Care

Many of us will need to spend some time during our lives receiving long term care, either at home or in a nursing facility.  In fact, experts estimate that two out of three senior citizens will spend some time in a long-term care facility.  Approximately one out of five people over the age of 65 will need to stay in long-term care for more than five years.  Everyone needs to make a plan for handling this future expense. 

You may want to purchase Long Term Care Insurance or make sure you have set aside enough assets to cover several years of care.  As part of your long-term care planning, you may also want to write a living will that explains the healthcare decisions you want made if you are too ill to speak to the doctors on your own behalf. 

Plan for How You Want to Spend Leisure Time

What do you want to do with the free time you will have when you retire?  Do you want to travel in an RV, take an annual cruise, spend time on the golf course, or take art classes?  Before you stop working, you need to make a plan that will allow for you to enjoy your retirement.  Perhaps you may want to move to another part of the world, sell your home and buy an RV, or move to a retirement community that has free or low cost amenities such as golf courses and art classes.  Whatever type of retirement appeals to you, you need to include the cost in your retirement planning.  In some cases, the cost of living in a retirement community, another country, or in an RV may be less than you are currently spending on living expenses.  However, it would be wise to discuss the change with others who have tried it and get their advice.  You want to be realistic about what your new lifestyle will cost.

Your Personal Retirement Plan

If you are a Baby Boomer who hopes to retire in the next few years, it is not too early to begin making plans and changes to your lifestyle so that you can make it happen.  There is no reason why anyone should assume that they will have to work until they drop dead at their desk, as I have sometimes heard some people say.  With a little planning, nearly anyone who has spent years working hard on a job will be able to make a plan and find a cozy, comfortable way to have the retirement they always wanted.

If you are interested in more retirement planning tips, use the tabs or pull down menu at the top of the page to find links to hundreds of additional articles on where to retire in the United States or abroad, financial planning, common medical issues, changing family relationships, travel and more.

For more help in making your retirement plans, you may also want to read:

Do You Need a Million Dollars to Retire?
Cheap Places to Retire
Finding Niche Retirement Communities
The Villages Active Adult Community in Florida
Popular Retirement Communities in the United States
Laguna Woods Village Active Adult Community
Garden Spot Village Community for Seniors in PA
Best Places to Retire Outside the US

You are reading from the blog:

Photo of couple courtesy of