There are a few options available in planning for long-term care. Some of these options are:
Some of the options are more desirable than others, and some may be out of reach for some people.
Using insurance to pay for long-term care can be a great option if it is available to you. First of all, you must be “insurable”. This may vary from company to company. Next the premiums must also be affordable. Quotes for premiums are higher for older persons, and go up as you age. Premiums for women are also usually higher than those for men. I guess that’s the price of living a longer life!
Some questions and benefits that you should look for in long-term care insurance include (but aren’t limited to):
Here, option 2 and 5 are pretty close to the same. The real difference being how much income do you have and will it continue during your incapacity. If it won’t continue, do you have sufficient net worth to provide your own long-term care and still provide all that you wish to your spouse, family, and loved ones? Costs for long-term care obviously varies with the level of care required, and quality of life desired. Do you want to live in an assisted living facility in La Jolla, your home, El Cajon (not that I have a problem with El Cajon!) or somewhere else? If you can afford about $100,000 per year for long-term care, this may be a good option for you. Also, you could use option 3 to replace or supplement consumed resources used for long-term care if you so desire.
This option may be used in conjunction with any of the other options if you choose. As long-term care costs arise, and as the bills are being paid, your assets are being depleted. Life insurance can be employed to replace that value so that your spouse, family, and loved ones are still taken care of. Should you not need to consume assets for long-term care, the life insurance and the assets will be there for your beneficiaries.
The use of a Trust will be discussed in another blog.
Again, like option 2, you are basically taking care of long-term care costs on your own. If you have sufficient assets, then you have lived a blessed life. If you do not have many assets and do no other planning, this will unfortunately be the default plan. One hopes to never need long-term care, and I think most of us would prefer another option to this choice. Choices are great, and we need to use them when we have the opportunity.
See lots of estate planning information on my website at: www.myestate-plan.com
Please feel free to give me a call today and we can review your situation and other Estate Planning goals. Everyone’s situation is different, and I can help create solutions.
William Daniel Powell (Dan)
This document is for informational purposes only. Nothing in this is to be considered legal advice. Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship. If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction. I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.
Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.