Long-term care insurance is one of the ways to pay for the necessary custodial care that may be required as we age. Many people do not take advantage of long-term care insurance due to the complexity and cost of coverage. An article in New York Times states that, “Some 70 percent of those over age 65 will require some form of long-term care before they die, but only about 20 percent own a policy.” If so many people will eventually require long-term care, why do so few have long-term care insurance policies? The New York Times attributes part of the problem to the rising cost of premiums, which have more than doubled from 2007 to 2014.
A policy that would have cost $1,982 yearly in 2007 would have cost around $5,000 yearly in 2014. For many middle class families in America, sustaining the costs of a policy like this is not realistic. It is argued that a large amount of individuals end up letting their policies lapse and thus forfeit benefits. In addition to the high cost, long-term care policies are also complex and can be difficult to understand. In the Times article, Brenda Cude, a professor at the University of Georgia urges readers to make sure they fully review and understand the policy they are buying. She also suggests consulting with an advisor that has your best interest in mind. The advisor should be someone who asks for a complete picture of your family’s financial resources.
Estate planning brings in other concerns regarding potential future long-term care costs. This is an important consideration if you want to leave something to heirs, since uninsured long-term care costs can consume your entire estate. New York Times suggests consulting a knowledgeable professional, like an elder law attorney, who can give you an objective recommendation.
At Tully Law, P.C. we believe that long-term care insurance plays a vital role in the complete planning process. As Long Island residents, we fortunately have access to a special type of policy called the New York State Partnership for Long Term Care. We are available to help you with all aspects of the estate planning and the long-term care planning process. Please schedule a consultation with us to learn what your options are.