Comments Off on Recommended Reads: Long Term Care Insurance & Legal Advice for Boomers
On July 21st at the Rhode Island Alzheimer’s Association, as part of its “Getting Started” series, I presented on the Legal and Financial Aspects of Alzheimer’s Disease. A number of excellent questions arose from the discussion with the program participants, including one which does not arise frequently at gathering of this type, and the second which I do not ever recall hearing at a gathering of this type. I told the group that I would post some references pertaining to each of questions, which I will in this post.
Both questions share a similar theme, which is how do those of the baby boomer generation (or even older Gen-Xers), who are in the role of caregivers for those with Alzheimer’s Diseases or other chronic conditions prepare themselves for a future in which they themselves may face these circumstances.
The first question was about long-term care insurance. I related to the group that these products had undergone a number of changes since first coming on the scene in the 1980s, including in their pricing and the availability of companies issuing these policies. Perhaps the best recent articles on this topic which I have seen was from the Wall Street Journal, with the descriptive title Long term care insurance: Is it worth it?
The second question was whether I knew of “plain English” (versus legalese) book about what baby boomers, Gen Xers and others should be aware of as we grow older. My initial response to this question was later confirmed when a pulled from my bookshelf Alive and Kicking: Legal Advice for Boomers. A co-author of this book is Robert B. Fleming, an Arizona attorney who is also the co-author of a book that I use for my spring semester course at Roger Williams University. I first met Robert in 1990 in San Diego, California at my first National Academy of Elder Law Attorneys program. He writes in lively, straightforward style, and his book would be where I suggest that anyone (and not just baby boomers) begin.
Comments Off on Announcing the Long Term Care Planning Blog
Counseling clients facing the prospect of $10,000 per month nursing home costs and other costs of long term care is perhaps the most challenging aspect of the practice of Elder Law. For in addition to knowing substantive law in areas ranging from public benefits to tax planning, the Elder Law practitioner must be aware of community resources such as geriatric care managers, client-centered financial advisors, and excellent providers of long term care services.
That is why I am delighted to announce the launch of a new blog devoted to long term care planning, The Long Term Care Planning Blog is hosted on the Law Professor Blogs Network. As an adjunct law professor at Roger Williams University Law School and a certified elder law attorney (CELA) I will be serving as the blog’s editor. The best part is that nationally known practitioners and other professionals whom I am known or admired for decades have agree to serve as contributing editors, including:
Maryland elder law and special needs attorney Morris Klein, CELA
We look forward to covering many more issues related to long term care planning over the coming weeks and months, and invite you to leave feedback and questions using the blog’s comment system, or directly to me or any of our authors via email, which you will find beside our pictures at the bottom of the blog homepage.
You can also sign up to receive new blog posts by email by clicking on “Subscribe” at the top of the blog homepage.
Comments Off on When Long Term Care Insurance Does Not Really Insure Long Term Care
A March 8, 2013 article about long term care insurance in the Wall Street Journal entitled “Can You Afford to Get Older?”, drew a useful distinction between good and bad long term care insurance policies.
While noting that “[a] good long-term care policy can cover a significant of [long term care] costs…[a] bad policy could cost you a small fortune in premiums for coverage so limited it is is essentially worthless”.
Suppose someone enters a nursing home who has long term care insurance. He or she is all set financially, right? Not necessarily. I have seen many instances in which someone has purchased a long term care policy, only to find that the policy’s coverage equals only a fraction of what the nursing home actually ends up costing.
Take the gentleman who ten years ago was farsighted enough to anticipate the potential of his requiring long term care in the future. However, he had limited means, so the policy he purchased paid at the maximum rate of $100 per day for three years.
Fast forward ten years later. The gentlemen enters a nursing home whose daily rate is $300 per day. This means that he has a shortfall of $200 per day, or $6,000 per month! He receives $1000 per month in Social Security, meaning that he has to use his savings at the rate of $5000 per month, or $60,000 per year. This will pretty much wipe him out in less than a year.
So he diligently paid premiums over ten years on a policy which failed to achieve his goal of protecting this assets from the costs of long term care. As the Wall Street Journal article pointed out, good policies–meaning those from solid companies, with realistic coverage including inflation riders, etc–can be excellent investments. However, policies which fall short of these and other essential features can be a waste of money and provide a false sense of security.
So if you already have a long term care insurance policy, a “reality check” is in order. A good place to start is at the Genworth 2012 Cost of Care Survey, which provides statistics on the average cost of home care, assisted living, and nursing home costs in each of the 50 States. Though as the expression goes “your mileage may vary”, the Survey at least puts you in the ballpark of current reality of the cost of long term care.
If you find that there is a significant gap between what your policy pays and the cost of care in your area, don’t panic. Rather, consult with a trusted and competent long term care insurance professional or with an elder law attorney regarding your options. For even a long term care insurance policy that falls short of the current cost of care generally has a place in a comprehensive asset protection plan.