Being in the health care field; we all too often come across families that have not been able to plan for events that limit a family member from living independently. As our parents get older, it is likely that they will develop ailments which will necessitate the provision of care in some form, allowing them to continue functioning. Coping with this situation inevitably falls on family members, and if there are not adequate funds to hire professional care-givers, the family has to team together to provide the help needed.
One possible source of funds is Long Term Care Insurance. This type of insurance should be considered by all families as part of their planning. However, best estimates are that between 10% and 20% of US households have purchased long term care insurance.
What are the chances I will need long term care in a nursing home? For individuals that are 65 and older:
· About one third will need a nursing home for 3 months or more.
· About a quarter will need a year of care or more
· About a tenth will require 5 years or more of care.
The annual cost of being in a nursing home can run to more than $70,000.
How do I know whether I need long term care insurance?
· If you have sufficient funds in addition to the value of your home, to cover your care needs, you may not need to do this. However, if you are concerned about depleting your assets, it is still worth considering. Funds in excess of several million dollars would mean that you have enough assets to weather your future care needs.
· If you have very few assets, your care will most likely be covered by Medicaid.
Assuming you have decided to go ahead with purchasing long term care insurance, you may want to consider these points:
· The right age to purchase is when you are in your 50s or early 60s. if you are older the premiums become much more expensive. Also, if you develop a serious health condition, you may not be able to purchase the insurance.
· You may need to use your policy in 20 to 30 years from now. Make sure you have built in inflation provisions.
· Do your homework to ensure you buy from a financially stable company that is still likely to be around 20 to 30 years from now.
· You cannot predict what might happen in the future, so ensure that the policy covers as many possible care situations including, skilled care, home health care, adult day care and custodial care.
· When will the policy be triggered? Review the terms and ensure they are typical. Typically benefits are paid when you are unable to perform 2 of 6 activities of daily living, including bathing, eating, using the bathroom, moving back and forth from a chair to a bed and remaining continent. How do you prove that you need the help? Typically benefits are also triggered when a cognitive impairment such as Alzheimer’s disease requires substantial supervision.
· How are benefits paid? This could be a daily amount regardless of costs which gives you greater flexibility should you want to engage a family member to help with your care and pay that person.
· Taxes? A qualified policy allows you to deduct a certain percentage of the premium, depending on your age, as a medical expense on your tax return. Medical expenses are deductible to the extent they exceed 7.5% of your adjusted gross income. Payouts from qualified policies are received free from federal income taxes. caregiver agency hiring