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Guarding Your Wealth for Senior Citizens
An Ounce of Prevention Worth a Pound of Cure When it
Comes to LTC Insurance
A real life story to motivate procrastinators on
long-term care
By Jeffrey D. Voudrie, CFP
 March 14, 2008 - We’ve all heard the old adage that
an ounce of prevention is worth a pound of cure. This applies to many
areas of life, but perhaps none better than in the area of long term
care.
Nobody likes to think about the possibility of
needing this kind of care and as a result, many people put off preparing
for it until it is too late. Here’s a real life story that will
hopefully motivate any procrastinators out there into action.
A dear friend of ours, whom we’ll call “April,” has
been helping her 88 year old mother recover from some fractures in her
spine caused by osteoporosis. After living independently and refusing
any kind of assistance for years, she has now decided she does not want
to go back home from the rehab hospital, but would rather go straight to
a nursing home facility.
As often happens with the elderly, declines in
health and mental attitude can come on quickly and such is the case
here. April’s mother has been a widow for several years and did not even
want her own children dropping by to help her with housekeeping.
But when her severe back pain turned out to be
three fractured vertebrae requiring surgery, she had a sudden change of
heart. Now, she would rather have others care for her and not have to
deal with keeping up a home.
Fortunately, 18 years ago when April’s mother was
70 years old, she purchased a long-term care insurance policy. While it
only covered nursing home care and not assisted living, it promised that
premiums would not increase over the life of the policy.
Her premiums were $1,800 a year, which seemed like
quite a sum to her and her husband back in 1990. But given the longevity
on her side of the family, they felt it was a wise decision.
They didn’t buy a similar policy for April’s
father, because he was a World War II veteran. In those days veterans
knew that they could live out their days in a V. A. nursing home should
the need arise.
As the years went by, the couple remained in
relatively good health. When a letter from the V. A. arrived years
later, he didn’t understand exactly what it said and didn’t realize that
the once-promised nursing home benefits for veterans had drastically
changed.
His family didn’t realize this either, until the
father developed severe Alzheimer’s a few years ago. That’s when they
discovered that the V. A. would only cover nursing home care for the
first 90 days. After that, you were on your own.
Unfortunately for him, his ability to swallow went
away quickly and he died soon after. Had his illness progressed more
slowly, his condition would have financially devastated his wife’s
financial security.
But because of the policy bought 18 years ago,
April’s mom will be well cared for. While $1,800 a year seemed so
expensive back in 1990, today it’s an absolute bargain.
With nursing home care in our area costing about
$175 a day, the $32,400 she’s paid in premiums will be recovered in less
than 6 months. Think about that. She’s paid premiums for 18 YEARS and
will get it all back with only 6 months care.
It’s true that if she recovers well enough to
handle most activities of daily living and goes into an assisted living
facility instead, she will have to pay for it. But given her age and
current condition, even if that is the case, most likely the need for
nursing home would simply be a matter of time.
But her policy gives her options she would not have
otherwise and will allow her to choose a quality facility without having
to consume her nest egg.
There are several lessons we can all learn from
this story. While we can’t predict our future, the increasing of life
spans and medical advances means most of us can expect a longer life
than our parents, increasing the likelihood of needing some kind of long
term care.
Medical costs continue to outpace inflation. If you
wait too long to apply for long term care, you may have developed
conditions that will medically disqualify you for it.
So don’t put off this very important aspect of your
financial plan. An ounce of prevention is certainly worth a pound of
cure.
If you have a specific question or would like more
information, give me a call toll-free at 1-877-827-1463 or you can also reach me by email at
jeff@guardingyourwealth.com.
I will answer your financial question FREE.
About Guarding Your Wealth:
“Guarding Your Wealth” is a
nationally syndicated weekly personal finance column written by Jeffrey
D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group,
a private wealth management firm that employs sophisticated proprietary
strategies designed to protect and grow its clients' investments. Visit his website,
www.guardingyourwealth.com to read past articles under the Guarding
Your Wealth Article Archive that may not have appeared in
SeniorJournal.com.
Guarding Your Wealth for Seniors, on
SeniorJournal.com, is
a collection of columns by Voudrie that deal with issues of particular
interest to senior citizens.
Click here
for all columns.
In addition to being a nationally
syndicated columnist and Certified Financial Planning Practitioner, Mr.
Voudrie provides personal, private money management services to select
private clients
nationwide.
Looking for an energetic expert who
is passionate about financial and wealth management? Mr. Voudrie is an
excellent speaker who will excite and inspire your audience. Mr. Voudrie
is available for a limited number of speaking engagements, television
appearances and radio talk shows. For bookings, email
jeff@guardingyourwealth.com.
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