Sunday, April 26, 2009

How Have you Planned to Live to 100?

Congratulations baby boomers, up to three million of the 76 million of you will celebrate your 100th birthday! Today's centenarians have become the poster children for what scientists call the "longevity revolution," which has added more than 30 years to life expectancy over the past 100 years. How well you live during those extra years will depend on how well you’ve planned for the ordinary cost of living longer and the extraordinary cost if you need long term care.
We all know the value of buying life insurance – it’s there for a rainy day or to protect the people we love from the financial impact of a premature death. Yet, how well have you protected those same people in the event that you don’t die? How well have you protected your retirement income and the emotional and logistical burden of caring for you in the event that you are no longer able to care for yourself due to physical limitations or some form of dementia.
Americans are in denial about the oncoming crises in the costs of care. A recent poll indicated that 59 percent of baby boomers are concerned about the growing cost of care, yet 72 percent have made no plans. Maybe because we believe that Medicare will pay for our care. Think again. Maybe we think that Medical will pay for our care? It will, if you’ve become financially impoverished and want to stay at a Medical-funded nursing home. If you want to maintain your choices and stay out of a nursing home, your only options are to spend your own assets or buy long term care insurance.

Results of the Genworth Financial’s "2007 Cost of Care Survey" the average national cost of care in nursing homes, assisted living facilities and home-based care increased 15 percent since 2004. According to the survey, the average daily rate of private nursing home care is $204. The cost of assisted living can be close to the same price if you need care and even a home health care provider averages $19 an hour. As the costs grow an average of five percent a year, will you be able to shoulder these expenses on your own?

Although the majority of people who require long-term care are over the age of 65, a substantial 40 percent are between ages 18-64, so don't think you’re “too young,” to be in care. When considering the purchase of long term care insurance understand that you will need to meet medical qualifications and even a bad diagnoses can make the coverage unavailable. Although, once you’ve been approved for a policy, it is “guaranteed renewable,” and no changes in your health can impact your coverage. Waiting too long may mean loosing your “insurability” due to pre-existing health conditions. Because the premiums are based on your current age, waiting may also mean paying much higher premiums. Other factors in determining premiums are health, martial status and the amount of coverage you purchase.

The product is not suitable for everyone. If you have to make substantial changes in your lifestyle to pay your premiums, it isn’t for you. Like any insurance product, it is for those who have something to protect and something to loose. The product is suitable for anyone who wants to avoid an unintended invasion of their portfolio and for those who want to maintain their independence, their choices and help their kids fulfill their promise that they’ll never put you in a nursing home.

This isn’t a do-it-yourself product. Meet with an agent who specializes in long term care insurance so that they can pick the most appropriate plan at an affordable premium.

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