When Should I Consider Long Term Care Insurance?

Many people haven’t adequately planned for long term care costs. Consider long term care insurance early as a way to cover those costs.

You can bet that you won’t need long term care in your lifetime, but you’ll probably lose that bet: about 70% of seniors 65 and older require long term care at some point. That could be just a few months with a home health aide or it could mean a year (or more) of nursing home care. You can’t know for sure. However, without long term care insurance, you run the risk that you’ll be forced to cover a very large expense on your own.

The Motley Fool’s recent article, “75% of Older Americans Risk This Major Expense in the Future,” says many older workers are going into retirement without long term care coverage in place. In a recent Nationwide survey, 75% of future retirees aged 50 and over said they that don’t have long term care insurance. If that’s you, you should begin considering it, because the older you get, the more difficult it becomes to qualify, and the more expensive it becomes.

If you do not purchase long term are insurance, but need to pay for long term care, there are other options, such as government benefits like Medicaid.  I’ll focus on insurance in this article, but see here for more information about long term care and how to pay for it.  https://galligan-law.com/long-term-care-whats-it-all-about/

Long term care insurance can be costly, which is why many people don’t buy it. However, the odds are that your policy won’t be anywhere near as expensive as the actual price for the care you could end up needing. That’s why it’s important to look at your options for long term care insurance. The ideal time to apply is in your mid-50s. At that age, you’re more likely to be approved along with some discounts on your premiums. If you wait too long, you’ll risk being denied or seeing premiums that are prohibitively expensive.

Note that not all policies are the same. Therefore, you should look at what items are outside of your premium costs. This may include things such as the maximum daily benefit the policy permits or the maximum time frame covered by your policy. It should really be two years at a minimum. There are policies written that have a waiting period for having your benefits kick in and others that either don’t have one or have shorter time frames. Compare your options and see what makes the most sense.

You don’t necessarily need the most expensive long term care policy available. If you’ve saved a good amount for retirement, you’ll have the option of tapping your IRA or 401(k) to cover the cost of your care. The same is true if you own a home worth a lot of money, because you can sell it or borrow against it.

It’s important to remember to explore your options for long term care insurance, before that window of opportunity shuts because of age or health problems. Failing to secure a policy could leave you to cover what could be a devastatingly expensive bill.

Reference: Motley Fool (September 23, 2019) “75% of Older Americans Risk This Major Expense in the Future”

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What to Know About Continuing Care Retirement Communities

Continuing Care Retirement Communities are great residential options for some, but have many pros and cons to consider when planning your long term care.

With all the different types of residential options for seniors today, it is easy to get confused by the terminology. If you are trying to decide which choice is right for you or your loved one, you need to evaluate several kinds of arrangements. Here is what you need to know about continuing care retirement communities.

A continuing care retirement community (a “CCRC”) offers a continuum of care, from independent living for people who need no assistance, to assisted living that offers some services, to nursing home care that provides skilled nursing care. A person or couple usually move into the level they need, with the option to move to either more independence or more services as their needs change.  See here for more information on different options and how to pay for them.  https://galligan-law.com/practice-areas/elder-law/

The benefit of a continuing care retirement community (CCRC) is you do not have to move to a different facility when you need more medical attention or if your health improves. You would have to move to a different part of the community, that is usually in a separate building. However, all levels of care are at one campus or physical location.

The drawbacks of CCRC include:

  • These facilities tend to be more expensive than stand-alone centers. There is usually a sizeable entrance fee, ranging from $10,000 to $500,000.
  • The monthly expenses of living in a CCRC make these facilities out of range for low-income and most middle-income seniors. On top of the rent, there is a monthly maintenance fee that can range from $200 to more than $2,000.
  • There might not be a vacancy in the section to which you want to move, so you might have to go on a waiting list or move out of the CCRC to get the level of care you need. If you move out, you can lose the entrance fee you paid.
  • Usually, you do not own the place where you live, even though you might pay more than the market value of the building.

On the other hand, CCRCs have advantages, like:

  • A broader range of activities and services than stand-alone facilities.
  • Getting to stay close to the friends you have at the CCRC, when your needs change.
  • More options for independent living, like apartments, houses, duplexes and townhomes.
  • The CCRC arrangement creates a social network and helps residents get through grief when a spouse passes. Residents of CCRCs tend to have less social isolation and higher activity levels as widows or widowers, than people who live in single-family homes that are not part of a CCRC.
  • Because CCRCs have so many ongoing activities and the facilities include a range of opportunities for physical exercise, like swimming, yoga, tennis, golf, walking and dance, seniors in these communities tend to stay healthy and socially engaged.
  • Many CCRCs have barbers, hairdressers, grocery stores, coffee shops and retail shops onsite for the convenience of residents.
  • You can tailor your services to your desires. One resident might only want lawn care and snow removal. Another person might want housekeeping, meal preparation and transportation.

Make sure that you get detailed written information about all the costs for each service the CCRC offers and for all levels of care. Get the facility to tell you in writing what happens to your entrance fee, if you move from the facility.  You also want to make sure that your estate plan addresses any potential refunds of the entrance fee if you pass away as they often become probate assets without proper planning.

Compare at least three CCRC developments, if you decide that a CCRC is the option you prefer and can afford.

References:

A Place for Mom. “Continuing Care Retirement Communities.” (accessed August 21, 2019) https://www.aplaceformom.com/planning-and-advice/articles/continuing-care-retirement-communities

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Caring for an Elderly Parent Without Ruining Your Relationship

Caring for an elderly parent can strain the relationship. Keep these issues in mind to protect your relationship while caring for a parent.

Caring for an elderly parent is not easy.  If you have elderly parents, you might have to provide caregiving services at some point.  Whether that concept means hands-on personal assistance with things like bathing, dressing, grooming, and feeding, or handling their finances and making decisions for them, this change in your roles can be challenging for you and your parent. If you enjoy a great relationship with your parent, the initial conversation about these issues may be easier and you may find the suggestions I made in this Kevin’s Korner very helpful.  https://youtu.be/UI8mMp2ZnWg

But even if you don’t, its important to realize your parent’s condition may affect your relationship, and you want to be prepared so you can care for your loved one without worsening your relationship.  Here are some issues to consider about how to help your elderly parent without ruining your relationship.

It’s Usually Not “Leave It to Beaver”

Many people grow up seeing fictional families on television and wishing their parents and siblings got along better. No families measure up to the imaginary ones of fiction.  In fact, quite a few people have strained interactions with their parents.

Relationships carry the baggage of the past. It is not helpful for people to tell you to forget about the past. Your parent is the same person with whom you have had conflict, which means he or she will continue to do things that upset you. If your parent was extremely authoritarian or independent, it will be difficult for him or her to accept someone telling them what to do – especially one of their children.

Patience versus Doormat

You should try to be understanding of what your parent is going through, losing independence, feeling less valuable or powerful or no longer acting as a primary decision maker for the family. He might get confused and forget you already did things, he now accuses you of not doing. He might also be dealing with chronic pain and other health issues.  Some diseases such as dementia cause paranoia, and your parent might become suspicious of you because of it.

You should, however, set boundaries. Getting old does not give your parent a right to be physically, verbally, or emotionally abusive. Be firm with your parent, if any of these things happen. Being a dutiful son or daughter does not include being a doormat. Calmly inform your parent of the behavior that is not acceptable. You might need to have someone in social services arrange for counseling to help your parent adjust to the reality of aging and needing assistance.

Get Help

Caregiving takes a toll on the financial and physical health of the caregiver.  Understand that even though you love your parent, you don’t have to do everything.  Consider speaking with a care manager who can work with you to establish a care plan for your parent and help you hire other service providers to care for your parent.  This will relieve some of your burden, and give you a sense of comfort knowing your parent is cared for.  See this blog for more details.  https://galligan-law.com/long-term-care-whats-it-all-about/

The Silver Lining

For some people, this stage of life is a time to deal with unfinished business. You can talk out problems or questions. You might be able to resolve conflicts that could have caused you regrets down the road. The best approach for this goal to tread lightly. Remember that your parent might be frail no matter what they might think, and you should not assault them with a long list of criticisms and complaints.

Address only one piece of a small issue in a visit, and do not dredge up unpleasant topics in every visit. You do not want your parent to dread seeing you. Be the kind of person you might wish your parent had been when you were a child – kind, compassionate and nurturing.

Those of you who have enjoyed a happy, healthy relationship with your parents can deepen your mutual affection and interaction. Since your parent is no longer rushing around to work and raise a family, you can have uninterrupted conversations and create memories to treasure. People who have had strained relationships might reach the point at which they have pleasant times and treasured memories with their elderly parents.

References:

A Place for Mom. “Parenting the Parent: Caring for Elderly Parents.” (accessed August 21, 2019 ) https://www.aplaceformom.com/planning-and-advice/articles/caring-for-elderly-parents

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