Quote:
Originally Posted by chilegal
My husband and I travel a lot and are interested in knowing if it would be a good idea to get Long Term Health Insurance.
Can you help with pros and cons please.
Thanks
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Certainly! Did you mention travel because many LTC insurers won't pay benefits outside the United States and Canada? Let's assume you did.
The advantages of long-term care insurance is that if you ever should need help with regular activities of daily living due to a medical problem or congnitive impairment ie dementia, this insurance after a waiting period will pay for home care or care in a nursing home or assisted living facility. The care includes helping you dress, toileting, eating, transferring or moving about, and bathing. If you should need it, it is the least expensive way to pay for this kind of care.
Generally they say the best time to get this insurance is when you are 55 but Christopher Reeves should have gotten it at age 30 if he'd had a crystal ball and could have forseen the riding accident. He exhausted a Mutual of Omaha health insurance policy he had and Robin Williams stepped in and helped him with his medcal bills. So really we all should have it to protect against accidents but few if any of us do. Some of us have Disability Income insurance but that is just geared to replace regular living expenses in the event of a disability. It does not pay for extra expenses for custodial care the way long-termcare insurance does.
In this day and age 1/3 of us get cancer and it is projected by 2020 1/2 of us will have it... and more of us get other long term debilitating diseases where we lose the ability to care for ourselves. It wasn't like this 60 or more years ago when there was no such thing as heart disease or rarely any incidence of cancer or other long term chronic and degenerative diseases. In those days if people lived to be age five and survived childhood diseases, they lived to be 85 or 95 and died healthy in their sleep. There was no nursing home shortage like there is today because there wasn't the rampant problem of chronic and degenerative diseases then.
Today, as a result of all the toxins we are exposed to in our food, our methods of cooking our food (microwave), genetically modified foods which constitute 75% of what you'll find in a regular grocery store, our water, all the side effects of prescription drugs we take etc etc, unless you are someone that avoids all of this like the plague, chances are you might end up with one of these diseases that could lead to an inability to perform these activities of daily living and it would be a good idea to get the insurance.
The disadavantages are, if you don't end up needing it, it can be expensive however you can use HSA funds to pay for the premiums.
It used to be when this insurance had only been out for a few years that financial planners/CFPs would say, if you have $500,000 in liquid assets you could afford to go without this care... which was TERRIBLE advice. Nursing home and round the clock home care can cost $100,000 per year or more. No other kind of insurance pays for these kinds of expenses. Think what would happen if you broke your hip and were in a nursing home for 2 years and then recovered and had to pay for the cost yourself and you were only 65 when it happened, or worse, even YOUNGER. That would leave you with only $300,000 to fund your retirement. Now the CFPs know better. Now they say if you can afford to get the LTC insurance without it cramping your lifestyle do it. (CFPs that don't have a strong health insurance background don't often have good advice about health insurance however, but that is another question.) Or, if you are single and don't want to leave your money to anyone you can pay for your care yourself, spend down your assets and then Medicaid would pay the rest. But if you are on Medicaid, you'll not be able to choose the kind of care you want if the governement is paying for it. To retain your ability to choose, an LTC policy is the way to go.
Many of my clients with millions of dollars in assets who could certainly afford to pay for the care themselves have LTC insurance due to the fact that the annual insurance premium might be less than a half or a quarter of the cost of one months care in a nursing home and if they go on claim, it's only a matter of months before the insured person will have received in benefits everything that he paid in premiums and the insurance company will be on the hook for the rest. Also, unlike with health insurance, with most long-term care policies, once you go on claim, you no longer have to pay premiums.
So with LTC insurance you either make a little mistake by getting the insurance and not needing it or you make a big mistake by deciding to forgo it and then wishing you had it. If you wait until you think you might need it, it is TOO LATE, the insurer won't take you if you walk with a cane or the underwriter of the insurance company thinks you might be a good candidate for needing the care due to your lifestyle.
Of course the little known secret is people can avoid the chronic and degenerative diseases or get rid of one if one of their doctors is a good Naturopathic Doctor (and N.D not an M.D) since these doctors are the ones that have been trained to look at CAUSES of disease and by helping the patient to eliminate the cause with diet and natural medicine to strengthen their immune system, the body can fight off the disease on its own. This kind of medicine was mainstream medicine in the early 1900's and late 1800s and was why the elderly population was so much healthier than ours is today. (They try to have us think we are living longer and healthier lives today but this is only true if you look at average age factoring in infant mortality. the mean age shows a much much different picture.)
Deciding whether you need LTC insurance depends on all of the above. If you sky dive and want protection in case of an accident than yes, get it.
If you are basically lazy, like your junk food or even if you aren't lazy but eat the standard American Diet and tend to not be proactive when it come to your health preferring to just take whatever prescription your medical doctor recommends for whatever troubles you than yes, get it. If you are on the other hand health conscious, eat only or mostly organic foods, don't over do alchohol or rich foods and dairy and meat and are proactive when it comes to medical care, don't take prescriptions now for anything chronic and willing to give up your favorite foods for months to a few years to regain your health under the care of a naturopathic doctor if you should be diagnosed with a chronic or degenerative disease, you may be able to go without LTC insurance.
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