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Barbara’s Decision »
December 29, 2012 at 1:44 pm (UTC -6)
Does purchasing LTC insurance protect your assets, banking acct. etc. if you need to use assisted living or nursing home care?
December 30, 2012 at 1:36 pm (UTC -6)
The global answer Christine is yes but I have to qualify that with “it depends on the type of policy you buy”, and I will add two qualifiers for you to consider. First, you need to consider a long-term care Partnership policy which allows you to protect assets equal to the benefits paid out if you have to turn to Medicaid for help in the event the insurance isn’t enough. The premium is the same as for a non-Partnership policy so there is no downside to getting one. You do have to buy the appropriate inflation benefit for your age but you would want to do that anyway. You can learn more about Partnership policies by clicking here. That post will tell you the inflation requirements by age group and provide a link to a map that shows you the 40 states that are participating in the LTC Partnership. All of the states reciprocate on the asset protection except California. Second, you need to buy a meaningful benefit so you can make up the difference at claim time…otherwise a Partnership policy won’t help you. You can get some tips from “Your Customized Benefit Selection Process” but here is a quick formula: Look at the cost of care in your area, project it at 5% for 30 years, and choose a benefit that will pay the portion of that cost at that time. Do you want a plan that will pay half, 2/3, 80%? It’s most important to make sure your daily or monthly benefit pays the amount you want at claim time. How long it will pay is the secondary decision, especially if you buy a Partnership policy. If you need help going through this process and you don’t have a local professional who is knowledgeable in long-term care insurance, please complete the short questionnaire under the “Contact Us” tab. Oh yes, and a bonus answer to your question is that long-term care insurance also protects your assets if you need care at home, not just in a facility. Three-fourths of LTC happens at home and that’s really good news, isn’t it?
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