Long Term Care Insurance: A Battle of Money & Emotions

This week the New York Times published a story that will likely ring true to all those who have gone through the process of helping a loved one figure out how to secure the ideal long-term care. It is one of those issues that is easy to talk about in the abstract but that comes packed with intense emotion when one is actually thrust into it and forced to help those closest to them.

One of the scariest aspects to this situation is that it can arise virtually overnight. The NYT story shares the example of one man whose 81-year old parents seemed to go from swimming and playing sports to both becoming frail the next day. Their ailments struck at the same time. His mother developed dementia and passed away within a year of first falling ill. This left the family in a very tough spot. In the midst of grief, they had to make tough choices about how to ensure their father had proper care. Fortunately, the family was in a much better position than many, because the patriarch had purchased a long-term care insurance policy nearly three decades before. That insurance has been able to provide at-home caregivers for the last two years.

That is a key reason why the NY elder law attorneys at our firm encourage families to use long-term care insurance when possible while crafting long-term care plans.

In fact, the first-hand experience of the elder in this story ultimately led the adult son to purchase a long-term insurance policy for himself. Seeing the value up close is often the single biggest spur for others to take the time to do what needs to be done to plan for the future. If only more New Yorkers were able to see the merit early on, before disability or a medical emergency strikes, they would be better off.

An added complexity is the limited offerings for long-term care insurance. Because of the cost of elder care, many insurance providers are axing offerings and shrinking benefits. All of this comes with significant premium costs. For example, the NYT story notes how this year the average cost for a 60-year old couple is about $3,700 a year for a policy with inflation protection. That represents a 10% increase from last year. Importantly, less expensive policies are available with lower benefits (usually not pegged to inflation). In either case, however, having any policy versus no policy is the difference between staying in one’s home when special care is needed versus being forced to move into a nursing home.

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