Medicare expert Toni King writes a syndicated question and answer column helping retiring workers transition to Medicare benefits.
Dear Toni:
I have a long-term care policy with a major Long-Term Care insurance company that is no longer accepting new clients. Periodically, this company sends notifications of an option to increase the LTC coverage on the policy. I am not sure how much the average cost per year is for either nursing homes, assisted living or care at home. Therefore, I am not sure whether I need to increase my coverage.
This policy dates from around the time of 1998 and the premium is becoming unaffordable. I can see using my 401K to subsidize some of the cost.
Where I could find what the costs are, I would really appreciate it. That will help me decide if I should increase the benefits or drop the policy. Thanks. – Danny a Toni Says reader
Hello Danny:
We are noticing more long-term care issues at the Toni Says office (info@tonisys.com) because many people are waiting until they are retiring past 65 to apply for a Traditional long-term care policy and then the premium is unaffordable and not in their retirement budget.
Boomers need to be aware that the cost of long term care is projected to rise from an average Nursing Home/private room of $97,600 per year in 2018 to over $131,000 per year in 10 years and the estimated yearly cost to be $176,000 in 20 years.
To discover what the nursing home, assisted living and at home cost is in your specific area then Google your question or you can visit this site which is specific although Genworth may or may not be the company you want, but the site is good…https://www.genworth.com/aging-and-you/finances/cost-of-care.html
Many baby boomers are not concerned with long term care planning because many feel they have enough in their 401K to pay for a catastrophic illness. They do not realize that in 20 years when their health is failing that their savings and/or 401K could be wiped out because they failed to do proper long-term care planning.
Medicare does not pay for Nursing Home or at home care!
There is light at the end of the tunnel because with 10,000 baby boomers turning 65 every day for the next 15+ years, the insurance industry has designed new products for those concerned about long term care issues, who do not want to spend their hard-earned retirement dollars on a long-term care policy they may never use, so life and annuity policies with living benefits were born.
Life insurance or annuity policy with accelerated benefit riders such as terminal, critical or chronic illness benefits or death benefits (tax free). Many insurance companies are offering these living benefits because people want protection for a long-term care need and if they never have that need they have coverage for death benefits.
Living benefit riders include:
Terminal Illness Rider: Insured has an illness or condition that is expected to result in death within 24 months or less.
Chronic Illness Rider: Eligible insured is unable to perform 2 of the 6 activities of daily living (ADLs) or requires constant supervision to protect from threats to health or safety due to severe cognitive impairment.
Critical Illness Rider: Specific critical illness such as heart attack, stroke, invasive cancer and many more critical illnesses.
The face amount of the policy determines what the living benefits are based on and the severity of the condition will determine the percentage paid. Accelerated benefit riders are not a long-term care policy.
American Baby Boomer Society ™is now available to help educate America about Medicare. ABBS motto is “A Strong educated America is a strong America!”Visit www.ABBS4u.com or email info@abbs4u.com for more information.
Toni King, author of Medicare Survival Guide® Advanced is having a bundle book special for its readers at www.tonisays.com.
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