Long Term Care Insurance as a Financial Safety Net

As one of its top ten financial resolutions for 2008, Union Bank of California advises people to invest in long-term care insurance as part of a financial safety net for their families. Along with the government, private companies see the validity of both long-term care and disability insurance to help individuals deal with exorbitant medical costs. Some estimates predict that 50 percent of the population may need to rely on these types of policies in the future.

We agree that long-term care and disability policies are increasingly important insurance coverage. But purchasing a policy now doesn’t necessarily mean that coverage will be available when you need it.

People with Fibromyalgia, Lupus, Epstein Barr, Multiple Sclerosis, and Chronic Fatigue have few financial options aside from specialized insurance coverage. But we have seen an increase in insurance companies’ erroneous denial of individuals’ long-term care, long-term disability and health claims. Life is difficult enough for people suffering from a chronic illness, and we understand that having their claims denied by their private insurance company only exacerbates the situation.

The following are a few facts that highlight the problem:

• The government isn’t going to pay for long-term care at home, in a nursing home or in an assisted living center. Medicare pays 100 percent of long-term care for 20 days and all but $95 a day for the next 80 days. After that, nothing. And Medicare only pays for skilled care; most long-term care is not skilled care.
• The national average cost for nursing homes is approximately $105 a day. Assisted living ranges anywhere from $50 to $90 a day. These costs are perfectly capable of wiping out a lifetime of savings, not to mention the emotional effect long-term care has on a family.
• At age 65, a woman has a one out of two chance of spending some time in a nursing home. A man has a one out of three chance. In the case of men, mortality catches up with morbidity.
• Children would like to help, but children often have kids of their own. They certainly can’t quit their jobs to care for their parents.
• Most people want to choose where they go instead of having to go where they are taken, and if independence is important to them, they will need to have either a large estate or adequate insurance.

All this means that most people are better off with some form of long-term care or disability insurance than none at all. And when the time comes that you need it, we sincerely hope you are among the fortunate few who see the return on their investment. If you are not, we can help.

GK

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