Bait and Switched? Get Long-Term Planning Without Expensive Long-Term Care Insurance
By Attorney T.J. Rugg
By Attorney T.J. Rugg
Is long-term care insurance enough to protect your assets and family when faced with a nursing home crisis?
For many people, the idea of long-term care insurance is a great way to protect their estate from a devastating hit due to the rising costs of long-term care. Based on Ohio statistics, the average stay in a nursing home is nearly three years, and the average cost is $6,570 per month.
That means the average person should plan to pay nearly $237,000 for a nursing home stay. Because we are living longer due to medical advancements, and long-term care costs are continuing to rise, these figures will not get any smaller.
A common complaint AlerStallings hears from people who purchase long-term care insurance is that rates keep increasing. They purchased the policies when they were young and healthy, so the premiums started low. But now many insurance companies have raised rates considerably.
The insurance companies made some bad calculations when determining the initial premium. They didn’t account for modern medicine extending life expectancy (it has!). They assumed many people would let their policies lapse (they haven’t!). And they assumed the premiums invested in the stock market would continue to grow exponentially (they haven’t!).
The result is more premium dollars are needed to keep the long-term care benefit in place. Who is going to make the payment? Unfortunately, the consumers, and many are retired and on fixed incomes.
Recently, the U.S. Congressional Committee on Oversight and Government Reform put John Hancock Financial, the insurance company providing long-term care insurance to federal employees, under the microscope. The committee wants documentation relating to the 83 percent average rate increase for federal employees covered by long-term care insurance. Unfortunately, this type of sizable premium increase is not uncommon in this industry.
What can you do to protect your family and estate from the rising costs of long-term care? The simple answer: Plan ahead! Consider speaking with an Elder Law attorney at AlerStallings to discuss a comprehensive asset protection plan that can protect your house and other assets from being sold or spent to pay for long-term care.
The key is to start now, when you’re approaching retirement or settling into retirement. The sooner you start planning, the more you can protect.