Faithful Finance by Emily G. Stroud

Author:Emily G. Stroud
Language: eng
Format: epub
Publisher: HarperCollinsChristianPublishing
Published: 2017-11-15T00:00:00+00:00

Long-Term Care Insurance

I am personally in the life stage called the sandwich. That means that I have both aging parents and young children at the same time. My parents are now in their seventies, and I’m over F-O-R-T-Y years old. It honestly is very difficult for me to believe. I have no idea how it happened. Then I glance at a mirror and realize I need to pluck a gray hair out of the crown of my head. If the sun is shining just right, I can clearly see all of my newly acquired “sparkles.”

My children are still young because I had my first child when I was almost thirty-two years old. I’m the mother of an eleven-year-old daughter and a seven-year-old son. My plate is rather full. If you find yourself in the sandwich stage of life, it can be quite a challenge, both financially and emotionally, if you and your family are not properly prepared.

In the year 2000, I worked as a private banker for JP Morgan Chase in Dallas. I provided financial planning and investment management advice to high net worth individuals. I quickly learned the importance of long-term care insurance for aging individuals and couples. If a person becomes very ill and/or disabled, they could potentially require home health care and assistance with daily activities or full-time care in a nursing home. The purpose of long-term care insurance is to pay for the costs of this type of medical care, which can be very expensive. A quality, well-run private nursing home currently costs around $5,000 to $6,000 per month. If a person is not independently wealthy, or what we refer to as self-insured, then these expenses can completely erode an individual’s or a couple’s retirement savings.

The solution from a financial planning perspective is to purchase long-term care insurance for your loved ones before they reach the age and stage of life when they need extensive medical care. Otherwise, the family will have to pay cash for the expenses related to home health care or a nursing home. Unexpected medical expenses are the number one risk factor for eroding a family’s retirement savings. If you become completely indigent, meaning you have exhausted all of your financial resources, you could qualify for Medicaid. However, a nursing home paid for by Medicaid will be far from ideal care for you or your loved ones.

Many people mistakenly think that once they turn sixty-five, and are eligible for Medicare, that the insurance will also cover any long-term care needs in a nursing home if ever necessary. This is false information. Medicare only covers medically necessary acute care, such as doctor’s visits, drugs, and hospital stays. Medicare coverage also focuses on short-term services for conditions that are expected to improve, such as physical therapy to help you regain your function after a fall or stroke.

I personally encouraged my parents to purchase long-term care insurance while they were still young and healthy so that the premiums for the insurance would be affordable. The

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