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:

http://www.bankrate.com/finance/insurance/long-term-care-insurance-too-pricey-1.aspx

http://www.smartmoney.com/plan/insurance/weighing-the-longtermcare-insurance-alternatives-1348499043403/

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:  http://baby-boomer-retirement.blogspot.com

Photo of elderly couple courtesy of www.morguefile.com

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

AIDs or HIV
Alzheimer's or other types of dementia or memory loss
ALS
Cystic Fibrosis
Hemophilia
Hepatitis
Kidney Failure
Cirrhosis of the Liver
Multiple Sclerosis
Muscular Dystrophy
Paralysis
Parkinson's
Post-Polio Syndrome
Schizophrenia
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:  http://baby-boomer-retirement.blogspot.com

Photo of elderly man courtesy of www.morguefile.com


Source:

http://www.aaltci.org/long-term-care-insurance/learning-center/are-you-even-insurable.php

Popular Part-time Jobs For Retirees

One way to stretch our retirement income is with a part-time job.  Not only does it help retirees afford a higher quality of life, but it is also a pleasant way to stay connected to other people.  Because part-time work is becoming so common,  AARP recently came out with their list of five great part-time jobs for retirees.

As you may remember, I have written other blog posts about part-time jobs for retirees.  With Social Security benefits so low and retirement savings inadequate for at least half of all people who will be retiring soon, working after retirement is often not simply a matter of enjoyment, but of necessity.

There are many possible occupations for retirees.  Before you even browse through the AARP suggestions below, you should consider continuing to work in the same field where you have earned a living in the past, by asking for a lighter schedule.  You will not need to get more training and you may be able to earn at the top of the pay scale for that occupation.  For example, many retired teachers continue to work periodically as substitute teachers.  Other people may fill in for vacationing employees at their old company, or cover for someone who goes on maternity leave.  However, if you want to consider additional options for part-time retirement jobs, here are the AARP ideas:

Library Assistant or Aide

If you love to work around books, you might apply for a job at your local library.  You could work behind the desk answering questions and checking out books, or you might spend the time re-shelving books and sending out notices.  You could work a wide variety of hours, since many libraries are open late and on weekends.  In fact, if there is a university near you, some libraries stay open 24 hours of day!  Of course, that does not mean you would necessarily be expected to work in the middle of the night.   If you find a library position, you can expect to be paid anywhere from the minimum wage to as much as $17 or $18 an hour, depending on your experience and education.

In order to get a part-time job doing this, you may need to have prior experience working in a library or have a degree in library science.  Even having experience as a library volunteer may be helpful.  In addition, it could help you secure a library job if you worked in an office in the past and you can point out that you are able to do data entry or word processing on a computer, keep good records and you are knowledgeable about how a library works.

Bookkeeper

If you have a background in bookkeeping, this can be a fabulous part-time occupation after you retire.  Many small businesses hire part-time bookkeepers because they do not need a full-time one. You may only need one or two local clients to keep you busy and help you earn a little extra money.  Clients will expect to pay anywhere from $10 to $25 an hour, and sometimes as much as $50 an hour if you have extensive experience and training. It is possible that you will work at the business establishment that hires you.  However, many bookkeepers also perform this service from their own homes, which is appealing to many Baby Boomers who want to work their own hours. 

If you are looking for clients, it will be helpful to have experience in this field.  If you do not, you could complete a bookkeeping course at at local community college.  You will have to be familiar with accounts payable and receivable, maintaining bank accounts, producing financial reports, overseeing audits and maintaining computer systems.  Of course it is also important for you to be detail oriented.

You also need to be willing to contact local companies to find one that needs your services.  In other words, you have to have the ability to sell yourself and your skills.

Personal or Home-Care Aide

If you are healthy and active, you may be able to work as a home health aide during the first few years after you retire.  In this job you will take care of people who are much older than you.  Your duties would include companionship, grocery shopping, preparing meals, dispensing medications, and helping them with bathing and dressing.  It is common for home-care aides to only work a few hours a day, two or three days a week, so it is a perfect part-time job.  You can expect to be paid anywhere from the minimum wage to about $12 or $13 an hour.

There are training programs required for most jobs as a home care aide, but the programs only take a few weeks to complete.  Agencies often provide the training and then they will help place you in a job. If you have physical limitations, such as the inability to lift someone who has fallen, you need to let the agency know so that you are assigned to jobs that will not cause you harm.

As our population ages, the demand for home-care aides has become greater.  You do not need to have any prior experience in order to work part-time in this field, and it can be a welcome change from those high pressure jobs you may have had in the past.

Handyman

When I sold real estate, one of the most desirable people to know was the local handyman.  If you are adept at making minor repairs around the house, you will be able to find all the part-time jobs you can handle.  In fact, if you live in an area where there are many retirees, you are sure to get a lot of calls.  The types of jobs you will be asked to do include minor carpentry jobs, plumbing, basic electrical work, painting and similar minor home improvement projects.

You can charge $10 to $20 an hour, and sometimes more for larger or more complicated jobs.  You can work your own hours and decide which jobs you want to take.  In most states you will need to have a license to perform handyman services and you may need to carry liability insurance.  It is also necessary for you to have your own tools, as well as a desire to be helpful to others.

Medical Assistant

If you have experience working in a hospital or medical office, you may be able to find part-time work in this field after you retire.  The types of jobs you could do include working in the front office, billing insurance companies, scheduling appointments, etc.  Depending on your experience, you may also have additional duties.  Your pay can range from $10 to $20, or more, depending on your experience.

The medical field is an area that is growing rapidly.  If you do not have experience, however, it may be impossible to find a job in this area.  If you are inexperienced but have a strong desire to work in the medical field, you may decide to go through a certificate program at a local community college.  Some of these programs only take nine months to complete in order to be qualified to work in a variety of medical assisting occupations.


In addition to these jobs recommended by AARP, you will want to check out my other articles about jobs for retiring Baby Boomers.  You will find links to them in the index article "Money and Financial Planning for Baby Boomers."

If you are planning to retire soon, you may also be interested in checking out the index articles below.  Each one contains an introduction and a links to a variety of articles on those topics.

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:  http://baby-boomer-retirement.blogspot.com

Photo of carpenter courtesy of www.morguefile.com

Update on 2014 Affordable Care Act

Now that January, 2014 is only a few months away, it is becoming clearer how the Affordable Care Act will be implemented.  Like millions of other Americans, I recently received a letter from my insurance carrier, Kaiser Permanente, that provided more information about what to expect in the coming months.

These changes will have a major impact on many families and it is important that all of us stay informed so we are prepared to make the best decision for our family.  In addition, you may want to read my earlier blog post, "Help Soon for Boomers Without Health Insurance," to learn a little more information about how the the new health insurance exchanges will work.

Brief Overview of Heathcare Reform Changes

As of January 1, 2014, nearly everyone in the United States will have new health insurance opportunities as the result of the Affordable Care Act.  Here are some facts you will want to know:

Nearly everyone will be required to purchase health insurance or they will pay a penalty on their taxes at the end of the year.  At the end of the first year the penalties will be minimal, allowing people time to become accustomed to the change.  Gradually, the tax penalties will increase.

Every state will operate a Health Insurance Marketplace or Exchange.  Open enrollment begins in October, 2013.  You will be able to purchase insurance either in person, through the mail, by phone or on a website.

You cannot be turned down for health insurance, even if you are currently being treated for a serious illness such as cancer or diabetes.  You will no longer be required to have a medical review prior to approval.  People who have been unable to purchase an individual insurance policy in the past will now become eligible.

You may be able to get financial assistance to pay for your insurance and your out-of-pocket expenses.  The amount of assistance you get will depend on your income.  Kaiser gave the example that a single person earning less than $45,000 a year will be eligible for some financial aid.  This will be a tremendous help to a lot of single people and young families who are currently uninsured.  It could also help Baby Boomer couples when one of them is old enough for Medicare and their spouse is not.  If the older spouse is retired and their family income is low, they will be able to get financial assistance to help with the cost of health insurance for the younger spouse.  Since I have known several Baby Boomer couples who were faced with this situation, this could literally be a life-saver.

The Affordable Care Act requires four levels of coverage.  These have been called Bronze, Silver, Gold and Platinum.  Bronze plans will have the lowest premiums and the highest co-pays and out-of-pocket expenses.  At the other end of the spectrum, Platinum plans will have the highest premiums and the lowest co-pays and out-of-pocket expenses.  These four options will give everyone the choice that best meets their budget and healthcare needs.  Regardless of cost, all of the policies will have the same basic benefits such as a free annual physicals and certain diagnostic tests.

In addition to the plans mentioned above, there is also a catastrophic plan option.  This is only available for young adults under the age of 30, as well as families and older individuals who can show that they are not covered under an employer provided plan or an affordable individual plan.  The catastrophic plans will have even lower premiums and higher co-pays and out-of-pocket expenses than the Bronze plan mentioned above.  They will also provide the same basic benefits as the other plans, such as a free annual physical and preventative tests.  It's main purpose is to make it possible for everyone to have a comprehensive annual physical so that illnesses are caught early, when they can be treated most economically.  The catastrophic plan will also provide protection against crippling medical bills in the event of an emergency or serious illness.

If you currently have health insurance, over the next few months your carrier will be providing you with information about the changes you can expect to your policy.  Each company will have their own versions of the various plans for their customers to review. For those of you who do not currently have health insurance, you will find additional information in the coming months on this blog, as it becomes available.

Planning for Retirement

If you want more information to help you with your retirement plans, you may be interested in reading some of the articles listed in the index links shown below.  Click on the category that interests you and you will discover an introduction and a links to related articles on each 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:  http://baby-boomer-retirement.blogspot.com

Photo of stethoscope courtesy of www.morguefile.com