by Christopher Howard

Created on: January 31, 2009   Last Updated: February 13, 2009

In the past an elderly parent that was no longer self sufficient, moved into the home of one of their adult children. The adult children would take care of their parent(s) until they pass away. This was a time when children were born to parents that were in their late teens to early twenties. This allowed for the adult children to be retired and able to take care of their elderly parents. Even then, it could be a physical and monetary burden on adult children. Today, the roles of the adult children have changed.

Whether it is from the generation gap, a shift in home economics, or poverty, recent generations are relying on nursing homes, and home health-care organizations to take care of elderly parents. With a few exceptions, most elderly parents die in the hospital on government assistance or in a nursing home, leaving little money left in their estate for the benefit of their heirs. This could be avoided by purchasing long-term care insurance.

Why and when should we buy long-term care insurance? First, we must decide how long we anticipate living. For those of you snickering at the idea of predicting one's lifespan consider this. You anticipate that you will only live to be 70 years old. Therefore you purchase a term-life insurance policy that will only pay if you die before the age of 70 years old. Or perhaps you invested in an annuity that when unitized pays you until you turn 70 years old. What happens if you live to be 90 years old and require assisted living for the remaining ten to twenty years of your life? It's better to plan for living longer in order to prevent running out of money before you die.

It is no big surprise that the rising cost of health-care and assisted living continues to rise. Let's assume that you have invested in a retirement account during your 30 year career. You have been retired for the last 10 years and your retirement has provided a comfortable living. What if the value of your retirement is decreasing faster than you expected due to market and interest rate factors in a slowing economy? On top of that, your health is deteriorating and your adult children cannot afford to take care of you at home. Now it is too late to purchase long-term care insurance.

The fact is no one can predict the future of the economy or their lifespan. And unless the company you worked for has provided you with some type of pension or continued insurance during retirement, purchasing a long-term care insurance policy is the best way to make sure that you are covered with these uncertainties. When you should purchase a long-term care policy is determined by anticipating possible future needs of nursing care, and your current situation.

For example, you are a healthy male age 65 and you have no prior major health problems. You don't anticipate having to be in a long-term care facility however, your father lived to be 90 years old but spent the last two years of his life in a nursing home with dementia. I this case, it would be prudent to purchase a long-term care policy within the next ten to twenty years.

As it is difficult to foresee future health-care needs as mentioned earlier, it is imperative to purchase a long-term care insurance policy before the actual need arises. At the point when the need arises, it may be too expensive or you may no longer be eligible. In most cases, the premium you pay on a long-term care insurance policy is less than the money spent on long-term care out of your retirement. It may also prevent the need for government assistance and being forced to rely on lower quality care.

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