retirement

Long-term care agents defend insurance

Dear Boomer Bucks,
Call me biased or just call me a responsible 45-year-old adult, but I have purchased long-term care insurance. I work for a long-term care insurance company and witness firsthand the hardship that long-term care can bring to a family. I have a mother with dementia in a nursing home which costs $10,000 a month with no end in sight. But let's put those facts aside. I also have plenty of money to "self-insure," but ask why wouldn't I want to transfer this potentially huge financial risk to an insurance company for a reasonable premium? Isn't that the basic principle upon which insurance is based? I use insurance to protect my family from the loss of our home, our car, our health, and my income, so why wouldn't I want to do the same for long-term care expenses?

In my case, I will spend approximately $27,000 over the next 10 years to fund a policy that will offer me hundreds of thousands of dollars in protection. And by the way, the benefits paid under my policy will be tax-free. That's not the case if I have to start liquidating investments. My after-tax cost will actually be much less than $27,000 because New York state offers a 20-percent tax credit for long-term care premiums, and I will use pre-tax dollars from my HSA to pay my premiums. I will pay the premiums during my peak earning years when I can most afford them, and by age 55 I'll be done. I will have no more premium payments, and the risk of needing long-term care will be one less thing that I and my family have to worry about as I approach retirement.

I have purchased a policy called Simplicity for MedAmerica Insurance Company that will pay me a monthly cash benefit without hassling me for copies of receipts, bills from providers or claim forms. It will give me and my family the flexibility to get care from whomever we want in whatever setting we want. I hope to stay in my home as long as possible, and this policy will give me the financial resources and the support network of my insurance company to do that without burdening my spouse and children. I don't know about you, but the last thing I want is for my kids to have to take time away from their own families to baby-sit dad in his final days. I also don't want my wife to have to make the sacrifices that I know are necessary to care for an ailing spouse. Instead, I want to be able to spend quality time with my family right up until the end without being a burden to them. In my opinion, long-term care insurance represents the best bet for meeting these wishes.

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Long-term care is a very real risk for all of us and a potentially devastating problem for families that haven't planned for it. If you want to protect yourself and your family, I believe long-term care insurance is an investment worth making.

Chris Perna
MedAmerica Insurance Company

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