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Father’s Day: Long Term Care Insurance

BOSTON (CBS) – Long-term care is a variety of services that includes medical and non-medical care. Most long-term care is to assist people with support services for activities of daily living such as dressing, bathing, and using the bathroom. Long-term care can be provided at home, in assisted living facilities or in nursing homes.

The cost of a LTC insurance premium is considered a medical expense when doing your taxes.

According to latest Genworth Financials’ Long Term Care survey, the national annual average cost of a semi-private room in a nursing home is around $82,000 and it costs over $135,000 here in Massachusetts.

According to the CDC, there are 1.7 million nursing home beds available. According to AARP only 2% of Americans age 65 to 84 and 14% of Americans age 85 or older live in nursing homes. Many retirees enter a nursing home as a rehab facility after surgery such as a knee replacement but then it is covered by their health insurance and they are home in a couple of weeks.

So does Dad need long-term care insurance? I don’t know! It’s such a personal decision. If Dad has very few assets and it would be a financial hardship for him to pay the premiums for the insurance, then he probably doesn’t need it. He will be eligible for Medicaid and community home-care services that charge a fee on a sliding scale.

If Dad has assets over $100,000 and a home you might want to consider buying the insurance. If dad does not want the insurance and the kids want to protect the house they can buy the insurance for dad.

If his invested assets exceed $1 million, he may not need long-term care insurance because he can self-insure at that level.

The cost of LTC insurance  has increased 30% over the last five years and less than 15 companies are now selling LTC insurance. When shopping for a policy look for a reputable insurance company. And the younger you are the cheaper the premium will be. But you will be paying it for a longer time period and you do run the risk of being uninsurable if you wait till age 75.

Consumer Affairs has done a comparison of Ten Insurers. Another article from the Consumer Advocate also list the 10 best insurers for 2017.

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You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.

Subscribe to Dee’s Money Matters newsletter here.

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