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 November 19, 1999

Should you buy long-term care policy?

Dressing, bathing, eating, toileting and transferring. The five activities of daily life seem simple. When seniors need help doing two of these, long-term insurance can cover the cost. Who needs this coverage depends on:

* Age. Buying between age 55 to 65 is best: Younger and healthier applicants lock in lower premiums that won’t increase with age.

For the same policy, a 65-year-old pays $100 a month, a 58-year-old pays $50, and a 72-year-old pays $208 a month. Assume each uses the policy at age 85: The 72-year-old paid $32,448 over 13 years; the 65-year-old paid $24,000 over 20 years; and the 58-year-old paid $12,000 over 27 years. That $12,000 will be paid back in benefits in a matter of months. Because women tend to outlive men by five to seven years, they are good candidates for this coverage.

* Assets. Buy long-term insurance to preserve assets and income, perhaps to leave an inheritance to children or charity. If a couple’s estate, excluding their home, is worth $83,960 or less, they could qualify for Medicaid and wouldn’t need private insurance.

* Affordability. Are the premiums affordable without an alteration in lifestyle? Don’t buy the insurance if the premiums are too costly. And don’t shop just for the lowest premium: Find a solid company that won’t go out of business overnight.

GE Financial Network, the first company to offer this insurance, has a “cost estimator” at its Web site, www.gefn.com./longtermcare. Although it simplifies the options available, it’s a useful starting place.

– Ellen Schur Brown

Dressing, bathing, eating, toileting and transferring. The five activities of daily life seem simple. When seniors need help doing two of these, long-term insurance can cover the cost. Who needs this coverage depends on:

* Age. Buying between age 55 to 65 is best: Younger and healthier applicants lock in lower premiums that won’t increase with age.

For the same policy, a 65-year-old pays $100 a month, a 58-year-old pays $50, and a 72-year-old pays $208 a month. Assume each uses the policy at age 85: The 72-year-old paid $32,448 over 13 years; the 65-year-old paid $24,000 over 20 years; and…

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