Be Prepared For Long Term Care
is a Financial Advisor with Ameriprise Financial Services based in San
Francisco, California and can be reached at email@example.com
One of his specialties is
comprehensive financial planning for gay and lesbian individuals and couples.
Brandon Miller has a website that can
be found at http://gayfinancialadvisors.com/California.htm
to healthier lifestyles and medical advances, Americans are living longer
than they used to. The average male
is expected to live until he is 76 years old, compared to 30 years ago when the
average male life expectancy was 70. The
average female is expected to live until she is 80, compared to a 75-year life
expectancy 30 years ago. However,
even though we are living longer, most
Americans are not adequately prepared for the costs of long-term care.
Many people mistakenly believe that Medicare will
cover their long-term care costs. However,
Medicare, the federal health insurance program, was truly designed to help pay
for short-term care. While it does
provide coverage in the early stages of care, it does not pay for any long-term
care. Currently, Medicare pays all
expenses up to 20 days. After 20
days, it covers expenses up to $95 per day.
After 100 days, Medicare doesn’t pay for any expenses. For more information about what you can expect from Medicare
coverage, go to www.medicare.gov.
Once you face the reality that Medicare was not set
up to help pay the costs of long-term care, you also must realize that long-term
care is expensive, and it can very quickly deplete savings and jeopardize your
family’s financial stability. For
example, the average cost of nursing
home care is estimated at more than $57,000 per year. (These costs are projected
to reach $190,000 a year by 2030.) The
current cost of in-home assistance averages $18 per hour, or $37,000 per year
for 40 hours a week of help.
Long-term care insurance
is a good option for protecting your assets if your health deteriorates and you
need assistance. Although long-term care insurance has been around for longer
than 20 years, purchasing this type of insurance can be confusing. Before you
purchase a long-term care insurance policy, here are a few things to consider:
A variety of factors determine the cost of your insurance policy, but the
biggest factor is the age at which you purchase the plan.
The earlier you purchase, the less expensive your premiums.
However, purchasing long-term care insurance too early may not save you
money in the long run because you will be paying for the premiums longer.
In general, it is recommended that you purchase long-term care insurance
in your late fifties to early sixties.
There are three basic levels of care you may need.
Skilled care involves licensed medical professionals at nursing
homes. Intermediate care
consists of limited licensed care with custodial assisted living. Finally, custodial
care assists with daily activities at home.
considering long-term care insurance, it is important to consider the policy
features and benefits. Now is not
the time to look for a bargain. Buying
a policy solely based on price may end up costing more if you have inadequate
coverage. So do some research
and ask some important questions, such as: Does the policy cover all care
levels? Is there automatic inflation protection?
Is there a mandatory elimination period? (In other words, once the claim is filled, how long is it
before you begin to receive benefits?) Eligibility: As with any insurance policy or contract, make sure to read
the fine print. Some policies do
not cover mental or nervous disorders, patients with substance abuse problems,
or intentionally inflicted injuries.
In 1996 Congress passed the Health Insurance Portability and
Accountability Act, which allows you to deduct your long-term care insurance
premiums from your taxable income. In
order to deduct medical expenses, the total costs must exceed 7.5 % of your
adjusted gross income. Check with
your tax advisor or financial planner to find out if your state also offers
income tax deductions or credits for long-term care insurance.
Some states have approved Medicaid programs called Long-Term Care Partnerships
or “partnership” policies. These
partnerships grant easier qualifying and asset protection when applicants have
long-term care insurance policies in place.
A qualified financial advisor can help you develop
a comprehensive financial plan that includes long-term care considerations, such
as insurance and retirement planning.
This information is provided for informational purposes
only. The information is intended to be generic in nature and should not be
applied or relied upon in any particular situation without the advice of your
tax, legal and/or your financial advisor. The views expressed may not be
suitable for every situation.
Ameriprise Financial Services, Member FINRA
Brandon Miller has a
website that can be found at http://gayfinancialadvisors.com/California.htm