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July 9 Wine Talk: A professional view of Long Term Care

Wine Talk

July 9, 2020

Featuring:  Timothy Bellig CLU®, CLTC® 

There are many myths surrounding Long Term Care.  Tim walks us through the seven most common:

1. I don't need to buy Long Term Care Insurance, the government will take care of me.

Long term care insurance is triggered with either severe cognitive impairment, or if two of the five essential daily living activities can't be accomplished by the insured.  They are: bathing, eating, transferring (travel), continence & dressing.

The government programs, however, have a lot more rules as to what triggers the ability to pay for long term care.  The programs this is referring to are medicare and medicaid which don't necessarily cover skilled care needed for long term care. The fine print will specify only a specific type of care for example, and they tend to cover much less time than a long term care insurance program.

2. I can save the money I'll need for long term care.

There are two questions to think about with this statement:  1: How will you save, and 2: Why would you save for it?  Assessing the cost of long term care, it could cost upward of $158,000 per year in a place like Napa for example.  This is important in the financial planning process as something that could deplete a nest-egg very quickly.

Research shows that if you or your spouse are 65 years or older, there is a 70% chance one of you will need long-term care.  With that in view, it may be a far more expensive task to save the money yourself than to have a long term care policy in place.

3. Only old people need long term care.

It is possible to see a need for Long Term Care at ages far younger than would be considered "old".  Cognitive impairment due to an accident for example is something that could happen at any age.  It is important to take an early look at long term care for this reason.

4. I don't need separate Long Term Care protection because I have health insurance.

The purpose of Health insurance is to cure you and get you back on the path to being healthy again and pays for the facility of improvement.  By contrast, Long Term Care insurance pays for the ongoing care of your basic needs, something health insurance wouldn't cover.

5. Long Term Care only pays for a nursing facility somewhere I don't want to be

 Long Term Care policies have been updated to include the place of care best suited to your desires.  This includes:  Your own home, assisted living, your relatives being paid to take care of you, etc...  80% of care provided in the home is from an unpaid relative.  This runs the risk of skilled care needed by an un-skilled caretaker.  These policies cover all of these types of care.

6. I pay enough for insurance in all other areas, I can't afford Long Term Care Insurance.

Most of the time, a plan can be designed to fit a family's budget.  Not all policies are the same and the right policy for you can be crafted based on the types of care you would be looking for and how it would fit into your financial plan.  84% of Long Term Care coverage is a linked benefit policy as opposed to a stand-alone policy.

7. We don't need Long Term Care protection because we have each other.

The Long Term Care need has a large impact on family both financially and emotionally.  Long Term Care protection eliminates this burden to family.

If you would like to explore the Long Term Care options that exist for you, please e-mail george@napawealth.com.

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