Sure, it seems crazy to start thinking about a possible future when you're infirmed and need long-term health care if you're only in your 50's. You're young, or relatively young, and healthy. But that's the point. You don't want to someday be unable to take care of yourself and wish that you had done some pre-planning. If you're in your 50's, and you're not thinking about long-term care, these are some reasons you should be considering it, such as:
(1.) You have plenty of time. That's why planning for long-term care now is a good idea. If you wait to plan for long-term care in your 60's, 70's or beyond, you're going to find that certain strategies aren't available (or practical) any longer. There are generally three approaches people take to long-term care, which are:
(a.) Private Pay: That is, no insurance, no government help – just you. You could research how much you'd likely spend if you became chronically ill and save for it. But that really isn't realistic for most people. The problem with private pay is that people often find themselves needing that money 10 to 15 years into their retirement just to make it. So people who are intent upon self-funding might find themselves without options later on after they begin paying a bill of over $8000.00 per month!
(b.) Medicaid:. Not Medicare, which won't pay for long-term care. "But Medicaid was created to do just that," experts say. For persons with typically less than $150,000 to $500,000 in retirement assets, Medicaid may make more sense. But experts always advise talking to an elder law attorney, who can guide you through the ins and outs of Medicaid.
(c.) Long-Term Care Insurance: After you purchase the policy and pay the premiums, of course – such as long-term insurance or a hybrid life insurance and long-term care policy. Clients who find insurance appealing need a competent broker that can walk them through the myriad of options available. There are even strategies an elder law attorney can implement in conjunction with a purchase of long term care insurance to ensure you get the biggest bang for your buck! Remember this, if you are thinking about the need for long-term care insurance, the 50's is the best time to buy it and take advantage of lower premiums! If you wait, you may not be able to afford the monthly premium.
(2. ) You're still healthy: Hopefully that's the case. Particularly if you're interested in any sort of long-term care insurance, which helps pay for the cost of having somebody help you with tasks like getting dressed and going to the bathroom. It's an unpleasant thought, of course, which is why many people don't like thinking ahead.
The key to purchasing long-term care insurance is to do so when you're still healthy to qualify. Once health deteriorates, clients may no longer be eligible for coverage, or their premiums may increase. Approximately 25 percent of applicants who wait to apply for long-term care insurance after age 60 are declined for health reasons.
(3.) Insurance is cheaper. Any health insurance is always cheaper when you're younger, which is why – if you plan to get it, you'd likely want to get long-term care insurance now versus much later. Some experts advocate buying long-term care insurance as early as your 40s. The premiums are less the younger you are, so it pays to get started early. The earliest I have heard of is a couple buying their policies when they were 43 years old. "Although we've had two premium increases since we bought them, we still pay around half of what people looking to buy traditional LTC at my current age of 55 [would pay] – and the benefits I own on that old policy are far greater than what I can quote a 55-year-old couple."
The average cost of long-term care insurance is all over the map, depending on the insurer, your age and the policy, so it's difficult to say how much any one person will pay. Still, to give you an idea of why it's cheaper to get it sooner rather than later, it can be instructive to look at some of the numbers on the website of the American Association for Long-Term Care Insurance, a national trade association. A couple, both 55 years of age, with a shared policy would, on average, pay $2,350 a year with a $150 maximum daily benefit and a three-year benefit period. The same couple, if they were each 60, would pay $2,970 a year.
(4.) You'll have some peace of mind, earlier. I often tell clients that if they can tell me the exact date they plan to die, I’ll tell them exactly what to do!! Yet, nobody knows the future, and so your planning may not help you someday – or you may draw up an elaborate plan only to later discover that someday, wow, you're a 101-year-old marathon runner who needs no help being taken care of, and all that money spent was for naught. But, still, there is something to be said for knowing that you probably have things figured out, way ahead of time. Life favors the prepared, after all.
Terri Cochran is the editor of a non-profit newsletter. She is 66 and says that she bought a long-term care insurance policy when she was 53. Her husband, Vince, the owner of a small laser manufacturing company was 69 and at the beginning stages of a neurodegenerative illness that they were then unaware of. An insurance company cold-called him, to sell him long-care insurance. He was ultimately denied due to his poor health, but Cochran decided to buy some for herself.
"I was afraid he would have expensive medical bills in the future, so it was another reason for me to have my own insurance," Cochran says. "Sure enough, he soon needed 10 hours a day of [care from] home health aides, which we paid out of pocket for well over 10 years until his death in 2016. We were lucky to have the money to pay for aides. I couldn't work either since he needed my full-time care."
Cochran says she feels prepared for the possibility that someday she may need long-term care, but even with the peace of mind of having a plan in place, she is a little unsettled. "If I do need to use my long-term care insurance, I hope the insurance company isn't difficult to work with. Because I hear horror stories about people trying to collect on their insurance when they need it," she says. But, imagine the horror stories of needing long-term care and not being prepared.
We deal with clients daily that are now in crisis and at a time when they would much prefer being with their spouse or loved one, they are busy gathering reams of documents, statements, policies, titles, deeds in order to structure accounts and investments, protect assets and apply for Medicaid on their behalf. While this is successful, waiting until the last minute certainly has costs, emotionally, monetarily and mentally.
If you feel the need to begin your planning, contact our office or a Certified Elder Law Attorney in your area!