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Is long-term care insurance right
for you?
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Barron offers the example of the late Christopher
Reeve, an actor who became paralyzed after a horse-riding accident.
"He was a young, healthy person who required long-term care
for quite some time. We never know if there's going to be an event
that comes up in our life. Assuming that your health is pretty constant,
though, I think between the ages of 55 and 65 is ideal."
In deciding when to acquire long-term
care insurance, be aware that, past the age of 65, costs start to become prohibitive.
Return-of-premium
rider
A typical long-term care insurance plan is much like any insurance
plan. You pay a regular premium for years, and if you don't ever have a need to
use it, the money's gone. But plans can have many movable
parts, and some offer riders that enable you to get your money back.
Roccy
DeFrancesco, founder of The Wealth Preservation Institute in St. Joseph, Mich.,
suggests that some people may want to consider getting a return-of-premium plan.
In these plans, if they aren't used, the premium can be returned to the heirs
after a policyholder's death. This approach is most common when the individual
owns a small business (C corporation) and can deduct the premiums.
DeFrancesco
says, "If you never need long-term care, and you want the money back, you
just cash it in." With a return-of-premium rider, the premium's cost is doubled,
he says.
Weighing
the costs
Most people want to die in their own beds at an advanced
age, preferably after an excellent meal and time spent with family and friends.
But there are no guarantees, and long-term care insurance is one way to minimize
the risk of the cost of care, should the worst-case scenario unfold. However,
if you just can't afford long-term care insurance or you, or a loved one, have
already been diagnosed with something that will eventually require nursing care,
what should you do?
"If you can't afford it," says
Rosenberg, "you can't afford it. Then you've got to do something different.
I'm a believer in long-term care insurance, but I'm also a believer in putting
your affairs in order and having that coordinate with the long-term care."
Those
who can't afford it should hire an elder law attorney who can help with Medicaid
planning, says Rosenberg. The attorney can also help put all the proper documentation
in place, such as a will and medical power of attorney.
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