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Preparing For Incapacity & Long Term Care

May 12, 2019

Preparing For Incapacity & Long Term Care

Individuals working for years and planning for retirement ultimately lead to be dynamic go-getters who don't want to think about the limitations and possible incapacitations of old age. However, with smart planning in your 50's and 60's, you can protect your heirs from financial risk and even protect a business from a crippling lack of leadership.

Costs of Long Term Care

Depending on where you live, long term care can cost you anything from $54,800 to $150,200 per year. While nearly half of all those who use a long term care facility are there for more than a year, this expense can be covered by a long term care policy. 

Average costs on long term care policies run approximately $2,700 per year, though significant discounts are available for couples. Depending on when you buy, you can lock in a low rate that will protect you from the expense of a long stay in an assisted care facility.

Business Protection

If a great deal of your assets are tied up in a business, work with your attorney and business partners to make sure that your assets and legacy will be protect in the event of a catastrophic health challenge. 

Make your intentions and goals known. Take care that any personal savings would be readily accessible to your spouse or heirs as you intend in the event you can no longer authorize withdrawals or sign checks. Consider setting up a trust to divert your assets into a tax protected vehicle in the event of your incapacitation.

Daily Cares

It's important to note that the majority of those currently receiving daily assistance are still living at home. In terms of budget, this makes good sense. While the average cost of a semi-private room is more than $80,000 in the United States, a full-time health aide will cost less than $50,000.

Spousal Protection

In the event of a catastrophic health event that requires skilled nursing care, a long term care policy can provide substantial protection for your remaining assets. For example, should your resources be exhausted and you need to rely on Medi-cal due to lack of insurance, your spouse would be able to keep slightly more than $100,000. 

With a long term care policy that offers asset protection for your partner, your partner will be able to keep more. The amount of protected coverage will be determined by the policy. 

Also be aware that Medi-cal rules vary from state to state, so don't rely on this protection without a careful review by your insurance agent and attorney.

Hybrid Policies

Long term care insurance can also be provided with a hybrid policy that offers whole life coverage. If you never need long term care, your whole life policy will benefit your heirs as any life insurance policy would. However, this policy is generally more than twice the price of a long term care policy, so consider this investment carefully.

Consider Touring Local Facilities

One of the greatest challenges in choosing long term care is finding a bed in an emergency. If your health history demonstrates that you may need long term care, consider finding a facility with a feeder facility, such as apartments or condos. You would likely have closer access to long term care when you need it, and you can use the features at the feeder facility to improve your health and put off long term care as long as possible.

The best time to make plans for long term care is long before you need it. With the right policy, you can protect your assets, guard your heirs and shield your partner from great worry and expense.