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Is LTC Assisted Living insurance really just for people who are living very frugally or who
are actively eating into their assets anyway?
QUESTION: My mother is considering long term care insurance and I'm looking for some
information and advice to help her with her decision. In our situation, I'm
having a hard time understanding what benefit it would provide. My mother
is currently living off of the interest from a decent sized trust fund.
It's not a huge amount of money, but she lives very well. From what I've
read, long term care, in a facility, costs something like $50K a year, which
is less than what she currently consumes anyway. To me then, something
going wrong that requires her to move into a facility would actually be a
bonus from a purely financial perspective.
Is LTC insurance really just for people who are living very frugally or who
are actively eating into their assets anyway? If LTC is $50K a year and you
spend that or more per year while healthy, then what benefit is the
insurance? If the problem is simply living to a very old age, then the LTC
insurance only helps if you actually become ill in such a way that it kicks
in, otherwise you're out of luck anyway.
What am I missing?
ANSWER: t seems to me that long term care insurance is NOT a good deal for most
people. The majority of Americans never need it. They can live independently
or in assisted living facilities until the end. Unless a family has something
such as Alzheimers in its history, it will probably not be needed. Most stays
in nursing homes are for short term after surgery or some such.
There are many ways to assist someone to stay independent. Probably the best
is to make sure the individual has physical activity of some kind. Every
senior center has exercise classes as well as lunch for those who want or need
it and they provide a social life with their peers.
I live in independent living, which is just housing that is designated for
those 55 and up. Many live independently until the end. Even those with
vision or memory problems do pretty well here. Residents kind of look out for
each other. Some have weekly housekeepers or meals-on-wheels. Some end up
going to assisted living but most never need a nursing home.
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