It's important to think about what you would want if help with day to day activities is needed for an extended period!

Thinking about a loss of health is scary and unpleasant for most people so the normal reaction is to just ignore the possibility. However, no one can say - I won't have a change in health tomorrow or in the future. Thus, these questions and points may be useful in thinking about what you want to happen if help is needed:

• Will your spouse be able to provide all needed care giver services? If no, who in your family could change what they are now doing to help?
• Is staying home to receive help what you want or would moving in with family members work?  
• Asking children to be a care giver for a parent, especially helping with personal care, is difficult and has a significant emotional effect.

What could transferring the big risk of "help might be needed" to a Long Term Care insurance company mean to you?

It does not mean health problems will not happen but it's a much better solution than having what might be called a defacto plan - that is to rely on family. You could gain advantages such as:

• A lower cost since the premium would be higher each year you wait to apply     Note: Purchase rates can triple from age 50 to 70.
• Can buy more benefits the younger you are. How? One effective plan design includes a benefit pool with the 5% compound inflation option so it will increase each year. For example, if you wait until age 55, you would have to buy a bigger initial benefit pool, e.g. over $400,000, and pay a higher rate because you are older, to achieve the same protection as a person who bought an initial benefit of $250,000 at age 45.
• A good health discount. For example, a study by AALTCi, a professional association, I'm actively involved in, reports 53.9% of people between 40 and 49 qualify for a good health discount. Between 50 to 59 it drops to 44.2% - 60 to 69 it's 31.9% - 70 to 79 it's only 18.8%.
• Another AALTCI study of 10 leading long term care insurance companies found up to 33% of individuals 60 to 69 were declined because of health problems. The average rate of declines for individuals 50 to 59 was 13.9%
• It's the most tax effective way to pay for high cost assistance!

What do people say who did buy?

• They did not want to burden family or others.
• They want to make their own decisions and be in control of the type of assistance and where help will be received.

What are some reasons everyone does not buy Long Term Care insurance?

• It's human nature to believe "I'm" invulnerable so it won't happen.
• Most people think of themselves as 10 or more years younger than they are. Thus, since they are busy with work, self improvement, and fun the normal reaction is - I'll worry about it and buy protection later.
• 54% believe MediCARE and 48% think medical insurance will pay when assistance for an on going chronic condition is required. They do not!
• Many believe MedicAID (welfare) will pay! It's purpose is medical coverage for the indigent and there is no guarantee MedicAID coverage will be available! Then too, because federal and state funding is limited there are limitations on the type and quality of care available and who can use MedicAID.

What happens if a person procrastinates on buying?

• Their savings nest egg could quickly run out if assistance is needed tomorrow. They would most likely become a burden on children and other family members.
• A person who waits and applies later will have a higher premium. e.g. rates are 33% higher at 55 vs 50 and 60% higher at 60 vs 55!
• Then too, significant government spending, like we see going on now, has in the past resulted in a big increase in inflation. This will cause the cost of long term services and support in Connecticut, already some of the most expensive in the U.S., to grow even faster than the 6% or so increases experienced in each of recent years.

If I pay premiums for a long time I may never get my money's worth?

Some things to consider:

• Buying insurance is not the same as putting money in an investment where you hope to get your "money plus more back". Instead an insurance buyer pays a premium and in return receives a guarantee the coverage purchased will be there if needed.
• Premiums are pennies in comparison to the actual cost of professional help. For example, if a 55 year old buys a Long Term Care insurance policy with a $7,500 monthly benefit, a 30 day waiting period, 5% compound inflation, and pays a premium for five years the money they paid in would come back in benefits in just 78 days! After paying for fifteen years they would break even in less than 5 months (143 days).
• A person buying Long Term Care insurance has access, in some plans, to professional care giving counselors. They meet with you, as soon as a life changing situation happens, to discuss long term service options, provide advisory services, and as professionals they are there with emotional support for the person and their family. These advisors are independent from any service providers they may discuss.

Ken Dychtwald, a leading authority on our aging population, has indicated Long Term Care insurance makes sense to him so:

• Independence can be maintained and children won't be burdened financially or emotionally.
• You can get quality care in the setting you choose.
  
• You stay in control of your money, retirement assets, and your life.
• Your spouse's lifestyle and financial security can be protected, while you're alive and afterwards.
• An inheritance for your children and grandchildren can be protected.

Call John C Parker today at 860.739.0005 to talk about all this. Taking steps to plan today so you won't burden family and can protect your savings nest egg is very important.