Is long term care insurance a good investment for a family members caring for aging parents?

Long-Term Care is designed to cover the expeneses of someone in a nursing home. The amount the plan will pay depends on the options selected when purchased.

If you or a family member are careing for a loved one and you feel that at some point they may require either home health care or nursing home care I feel LTC is a good idea. However, there are some things you need to consider.

1. The size of their estate. If the family member has a small estate it might not be worth the expense for LTC. LTC is a valuable tool to protect a persons assets from being spent down to provide for care. Because Medicaid requires that you spend down assets, the benefits paid form the LTC policy will protect those assets.

2. Amount of divertable income. When a person enters a nursing home facility typically all avaliable income will be diverted to the nursing home to pay for expenses. LTC can be used and should be used to make up the difference. For example, if the monthly expense is $4,500.00 and you family member has $2,000.00 in income the long-term care policy should provide enough benefit to cover the remaining $2,500.00. Since most companies have a minimum daily benefit of $100 the plan would pay out $3041.00 monthly. Because the plan will pay out $3,041.00 to the nursing home, it will leave $541.00 a month of her income avaliable for her to spend.

By taking their income into account, your not over purchasing coverage.

3. Another thing to consider is the facility where you want your family member to stay. If you have a spacific place in mind, talk with the home to determine the cost. Most plans can be purchased with inflation protection that compounds the daily benefit by typically 5% each year. By knowing the cost, it can help you determine the amount of coverage needed.

4. Finally, what is their health. LTC policies are not underwritten useing mortality (likelyhood of death) like life insurance. It is underwritten useing morbidity which evaluates the liklehood of disease or disibility. If the family member is ill or have a disabling medical condition, you may not be able to quilify.

Also be cautious when applying for coverage if the agent tells you they guarantee it will be issued. Look over and read the application to be sure all medical information is disclosed. Some dishonest agents will omit medical information while completing the application to ensure it will get issued. However, if this occures the company is likely to decline the calim. To be safe, review the application.

I hope this helps

Long term care insurance is NOT an investment. Look at the policy terms and conditions carefully - in many cases, it won't pay ALL your expenses.

Usually it's not a good buy if you're under 50.

In my personal opinion, I think LTC is great! No, it may not cover every cost, but you set that when you begin the policy. The most money you want paid out later, the more it will cost you now. I made sure my parents purchase a LTC policy, b/c we, as her children, may not be able to afford all of the medical expenses later!