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Ask The Experts: Mike Skiens

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Mike Skiens, Master Care Solutions, Portland, Ore.

Q: It seems there is a strong correlation between the national economic crisis and losing a lot of money from an unexpected LTCI event. Is there a way we can relate the two to help convince prospects of the need for LTC insurance?

A: Consumers, who have seen 30 percent to 50 percent or more of their net worth disappear as a result of the steep declines in the stock and housing markets, have experienced just a small sample of what it would be like if suddenly they found themselves needing long term care and didn’t have a plan in place to address those costs. Their hard-earned investments could be drastically reduced fairly quickly if suddenly they were dependent on their life savings to pay unexpected bills.

With average nursing home stays topping $77,380 annually (according to MetLife Mature Market Institute) and assisted living costs reaching approximately $36,096 (Genworth 2008 Cost of Care Survey), it wouldn’t take too long to put a major dent in life savings. For ideas on how to tie together the two concepts, I turned to some members of the National LTC Network. Here are their thoughts:

“If you lost half your net worth and needed long term care, you would be in a financially imperiled position of having to liquidate a proportionately larger chunk of your savings in an undervalued market with little opportunity to recover. In these times of tumultuous markets, it is more improbable than ever to self-fund and invest your way through a long term care event.”