Not all that long ago, long-term care insurance didn’t even register as a blip on my radar, but that quickly changed as my mom’s Alzheimer’s progressed. I had no idea how grateful I would be that she had the foresight to invest in a policy while she was healthy.
When it came time to look for long-term care for Mom, we were hit with an extreme case of sticker shock. We were, of course, shooting for the best care possible, and that meant private pay. Unless you’ve had prior experience in this area, it’s difficult to wrap your head around the numbers; they are staggering to say the least.
To put it in perspective, over the course of four years and a couple of months, the total cost of Mom’s care was nearly $300,000. That’s the flat monthly facility fee; it does not include medical expenses, prescription drugs, supplies, or any other extras. I’m still astounded when I see the numbers in black and white. Remarkably, her long-term care policy covered approximately 70% of that cost.
The Value of Being Prepared
My mother was more fortunate than many people in that she had a pension, but even those pension and social security checks can only go so far. Without that long-term care policy, we would have drained her savings in the blink of an eye. Bottom line, she couldn’t have had the quality of care that she had without LTC insurance. Not only that, but when the time came, we were able to focus on finding the right care without immediately agonizing over money. Sure, cost was always a concern; the policy would only pay out for three years, but it sure did beat trying to scrape together deposit plus first month’s rent during what was already a very emotional time.
And that’s why I’m a believer.
We see the ads and read the news articles about the growing importance of these policies, but I worry that many people just gloss over the statistics. Just as we often lose sight of our own mortality and take life for granted, I think we often think this information is for someone else. Think again! This pertains to all of us and baby boomers in particular. We aren’t getting any younger, and with a longer life expectancy comes a greater probability that long-term care will be necessary at some point.
Things to Consider
I can’t stress enough the importance of doing your research. Read the fine print. Talk to an expert or a trusted advisor. Don’t forget about things like inflation protection, and make sure you understand what constitutes a valid claim. Simply deciding you want to move to assisted living is not adequate! Typical policies will be very specific in spelling out what qualifies; for example, the inability to complete at least two activities of daily living (ADLs).
There’s a lot of information out there, but it’s worth taking the time to do your homework. AARP has a long-term care calculator available on their site, and A Place for Mom offers a cost of care calculator that facilitates comparison between assisted living costs in your city and the costs of maintaining a home and employing a full-time home care aide. Also, consider asking if your employer offers LTC insurance as an optional benefit. Even if your company doesn’t contribute to the cost, they may be able to negotiate better rates than you would find elsewhere.
Peace of Mind
Unfortunately, none of us has a crystal ball, and we don’t know what our future holds. In our case, the investment my mom made in long-term care insurance was obviously well worth it. The policy paid for itself exponentially and provided some peace of mind through the knowledge that we had a bit of time before we would be forced to tap into savings.
Do you have experience with LTC insurance? If so, we would love to hear your suggestions and comments!