Events Calendar
In This Section
Day with Warren Buffett enriching to UA students
WISDOM FROM BILLIONAIRE WARREN BUFFETT
FedEx says IRS won't be imposing penalties
U.S. Walmarts to stay open Thanksgiving
WOMEN'S LEADERSHIP PROGRAM MAKES DEBUT
Regulators eyeing Ally Bank tactics
Number of females in unions increasing
Most Read Stories
Suitcase causes bomb scare at Akron bus terminal
Akron City Council OKs higher speed on I-77
Chapel Hill isn't rolling right along
Motorcyclist killed, wife injured in Stark County crash
New eateries expand menu of options
Man says he was punched, robbed by 3 people in parking lot
Patrick McManamon: Here's what the Browns should try the rest of the season
Louisville athlete commits to play for Boston College
Family found dead in Ohio home
Blogs:
Pets:
It Takes All Kinds
The Heldenfiles:
Tuesday Notebook
Patrick McManamon:
An interesting thought from a reader
Akron Zips:
Akron vs. Mount Union — Liveblog
Tribe Matters:
Indians announce spring dates
Cleveland Browns:
Mangini doesn't name a quarterback
Kent State Sports:
Flashes interested in another Cincinnati player
Cleveland Cavaliers:
Shaq: It’s All About Winning Championships
Buckeye Blogging:
Buckeyes Roll 100-60 / Season Outlook
Varsity Letters:
Report: Walsh baseball player commits
All Da King's Men:
More On The Fort Hood Jihadist
Blog of Mass Destruction:
Simply Incapable of Telling The Truth
Akron Law Café:
Health Care Financing Reform: (63) Commonwealth Fund Report on Primary Care
See Jane Style:
Muffle Your Muffler
Car Chase:
Clock Tender- Extending the Life of Collector Car Clocks
Let's Talk Real Estate:
Rumors: Akron Starbucks Closing
Ohio Travels with Betty:
Jack is looking for a trip to Southern Ohio the week of November 16.
Sound Check:
Aeromsith looking for new singer as Steven Tyler contemplates solo career
HRLite House:
Personal Rant – Why People Do Not Live in Northeast Ohio
Akron Gamer:
Video: 'Modern Warfare 2' hits the streets
For those worried about losing thousands in life savings to long-term care facility, policy's expense is worth it
By Dave Carpenter
Associated Press
Published on Monday, Sep 22, 2008
CHICAGO: Joyce Smith visited friends recently at a modern nursing home that made her thankful she has long-term care insurance. With relatively plush conditions, including large private rooms and lots of space and privacy, this was the type of safety net she could live with someday.
Turning to her husband, she said: ''You keep paying that long-term care, Harry!''
While the Green Valley, Ariz., couple are healthy and hope they are years away from filing a claim, they figure they'll end up in much better hands thanks to the long-term care policy they secured six years ago when Harry was 54 and Joyce was 60. They acted after watching Joyce's mother, Gladys, fall ill and go into a nursing home without such protection, draining her life savings of $200,000 in 21/2 years.
''If you're able to, you should have it,'' Joyce says of the coverage. She takes comfort in knowing that she and her husband will be able to provide for any daily assistance they might need in later years.
The Smiths are among 8 million Americans with long-term care insurance — an area where insurers expect big growth as baby boomers zero in on their senior years.
The projections are high because the reality is that about 70 percent of people over 65 will require some type of long-term care services during their lifetime, according to the National Clearinghouse for Long-Term Care Information. It might come at any age, actually; 40 percent of people currently receiving long-term care are 64 or younger.
But adding a significant extra cost can be daunting, especially at a time when many are focused on saving for retirement.
So can figuring out what level of benefits you want and how long a period to pay for. Most people get three, four or five years of coverage, because only 20 percent of today's 65-year-olds will need care for more than five years. The more you sign up for, the higher the cost.
The price varies widely based on age, policy type, benefit level and number of years purchased, among other things, and can range from hundreds to thousands of dollars a year. Someone seeking protection equal to today's average annual cost of care, about $55,000, would pay $1,064 a year for a standard policy purchased at age 55 or $2,013 for a similar policy at age
65, according to the American Association for Long-Term Care Insurance, an industry group.
As a benchmark, Consumer Reports Money Adviser recently noted that, in general, coverage may be largely unaffordable for people with a net worth below $200,000 to $300,000, not including their home. If you're in that category, you will likely have to rely on government programs for any long-term care, which can cost you your choice of care facilities and, like Gladys, all your savings.
Other drawbacks also exist, including the limits and conditions of many policies.
But foregoing it is risky. Retiree health costs can be enormous without even factoring in the savings needed to cover long-term care expenses.
A man retiring at 65 in 2008 will need anywhere from $64,000 to $159,000 in savings to cover health insurance premiums and out-of-pocket expenses in retirement just for a 50 percent chance of having enough money, according to the Employee Benefit Research Institute, and $196,000 to $331,000 for a 90 percent chance.
A woman the same age would need $86,000 to $184,000 for a 50-50 chance and $223,000 to $390,000 to have a 90 percent chance.
The Smiths, who are retired, pay $4,995 a year for a joint policy with MassMutual that will provide extensive long-term care benefits for an unlimited time — now rare — when they become eligible by virtue of needing help with daily living activities. They consider themselves fortunate they locked in for that amount, having been told by their agent recently that it might cost triple the amount today.
''It's one of those insurance products that's kind of difficult to understand,'' says Harry, a retired firefighter. ''I studied it for nearly a year. . . . But it gives you peace of mind to have it.''
Having the insurance also protects children from a potentially heavy burden.
''We've had friends tell us, 'We're not getting long-term care, let the kids take care of us,' '' says Joyce, who with her husband has two daughters and a son. ''Well, that's not being very nice to the children. We don't want our kids to have to take care of us.''
On the Net:
National Clearinghouse for Long-Term Care Information: http://www.longtermcare.gov
American Association for Long-Term Care Insurance: http://www.aaltci.org
CHICAGO: Joyce Smith visited friends recently at a modern nursing home that made her thankful she has long-term care insurance. With relatively plush conditions, including large private rooms and lots of space and privacy, this was the type of safety net she could live with someday.
Get the full article here.
Comments
Click here to post your comments
