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Life Health > Long-Term Care Planning

Careless or Care-Free?

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How do you plan to spend your retirement? A little fishing, a little golf, some travel, maybe indulging in all those hobbies or sports you’ve been putting off in favor of your job for the past twenty or thirty years?

The prospect of a future without access to good medical care is a pretty scary one. Depending on which source you consult, the odds of any given person needing long-term care are one out of two. Not the kind of odds you’d like to gamble on.

Not only that, but 40% of those receiving long-term care are between the ages of 18 and 64. Not the sort of news you’d like to hear.

But the subject of long-term care insurance is complicated, and the process of selecting a policy is fraught with pitfalls. Nursing home care or home health care? Assisted living facility? Skilled or unskilled care? Reimbursement or indemnity? How long a waiting period? How many ADLs?

If all this sounds like so much Greek to you or to your client, head straight for the bookshelf and read Long-Term Care: Your Financial Planning Guide, by Phyllis Shelton (Kensington Books, 2001). Beginning with a discussion of who needs long-term care (not just senior citizens, remember) and what it consists of, this book covers just about every aspect of how to provide for yourself, your loved ones, or your clients through judicious use of policies and other strategies.

Shelton discusses who can safely self-insure (figure on an asset base of more than $2 million; according to Shelton, some planners specializing in wealth preservation won’t consider it for clients with assets under $5 million), why it doesn’t pay (lots of charts and tables to convince clients who may not realize how expensive this care can be), and different ways to pay for a policy. She also discusses a variety of strategies for those who may not be all that well off to be able to afford premiums (such things as reverse mortgages, annuities, and viatical settlements).

There is also a discussion on the ethics and realities of transferring assets in order to qualify for Medicaid payment of a nursing home stay. Planners with clients who favor this strategy may find they change their minds when they read about the pitfalls of being dependent on what Medicaid can provide–ethical issues aside.

The book is a mini-education not only in long-term care policies–what to look for, what sort of options to consider, how to decide on the cost-effectiveness of various riders for a particular situation, what the policies actually cover, how to file a claim, and what to expect when the policy begins to pay out–but also a thorough look at Medicare, Parts A and B, and Medicare supplement policies. It also includes extensive appendices with resources of state agencies on Medicaid and aging, insurance departments, Web sites, and sources for statistics and other information contained in the book.