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Long-Term Care

Long-Term Care Insurance is not for everyone. People with low assets and those that would have difficulty in making the annual premium payment for insurance should not purchase long-term care insurance. These people may be better off organizing their assets so that they can collect Medicaid. Generally, Medicaid supports people once they have spent all but $2,000 of their assets. In other words, you need to be broke. However, there are legal ways to shelter assets from Medicaid so that you can get support without being broke. If you want to know more, we offer a free one-hour consultation on Medicaid planning.

People with extremely large assets often have sufficient income and assets that can handle a monthly expense for long-term care. Many of these people still do, however, obtain insurance because it protects their estate from being ravaged by long-term care needs. It gives them peace of mind. Most importantly, it gives them independence by providing a separate source of funds that will be sure to be used only to provide quality long-term care.

The people that fall in the middle-income group need long-term care insurance. They have too much net worth to qualify for Medicaid, yet they do not have enough assets to handle the expense of long-term care. Draining $9,000 or more per month from anyone in this group would badly erode their estate or, in the case of a married couple, create a significant income hardship for the healthy spouse. So, if you are in this group, you should seriously consider insurance. Insurance can help you achieve financial independence as you would not need to rely on family members. Long-term care policies are only for people with significant assets they want to preserve for family members, to assure independence and not burden family members with nursing home bills.

When Should You Get Insurance?

Obtain insurance as early as possible. The longer you wait, the more expensive it gets. In general, each year you wait to start a policy, the premium jumps 8% or more.

Most importantly, the reason to start with insurance early is so you can qualify for coverage. As you age, you add the risk of adverse medical conditions in your records that would make you uninsurable. And you could also suffer an accident at an early age that would require full-time care.

Two Important Reasons to Get Long-Term Care Insurance

If you get sick and need help, who do you think will bear the burden? If you’re married, you will turn your spouse’s life upside down, from an easy retirement into a dreary existence. Is that what you want?

If you’re single, your kids will probably pay. They will either feel obligated to help you and try and fit assisting you into their already over-worked schedule or they will probably resent it.

Or, you will deplete your assets – money that would otherwise have gone to your children.

Therefore, it’s important to realize that a major reason to get long-term care insurance is to protect your family.

The other reason is to preserve your independence. Do you want your children helping you brush your teeth? Do you want family members deciding how to spend your assets for your care? Insurance provides a separate pot of money that can be used only for your quality care. You use it to get quality care from professionals, whether inside or outside your home. You keep your independence.


Other Options and Ideas

Some people resist the idea of purchasing long-term care policies. They argue that the money invested is wasted if they never use the insurance. Some insurance companies have answered this criticism with a policy that ALWAYS pays back at least what you invest. If you are interested in this alternative, call Joyce and she will provide the details.


The Baker/Brown Company • 2035 Droylsden Lane • Eustis, FL 32726
(301) 775-5089 • Fax (352) 308-8633 • e-mail address: joyce@bakerbrown.com

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The Baker/Brown Company and Grove Point Investments, LLC are unaffiliated entities.

Revised: July 2021

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