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A SAD TRUTH

One of the largest potential costs to adults today is the financial support of their parents. A major contributing factor to this risk is the likelihood that a parent will need nursing home or in-home care for the rest of their lives after illness strikes. These services can create a huge financial drain on any nest egg, and eventually on the adult children. Unfortunately, many parents approaching retirement have not been diligent in terms of financial planning, and there isn't much of a nest egg to shield the adult children financially.

LONG-TERM CARE INSURANCE

Long-term care insurance is vital for anyone over the age of 60 in the United States. This is because statistically, at that age it becomes much more likely for a person to need in-home or nursing care at some point. If long-term care insurance is not in place when this happens, the bill will be paid for by the assets of the person, and/or their children. In order to qualify for a Medicare facility, which is much less desirable than a non-Medicare facility, it will have to be shown that the patient has no assets that can be liquidated. They may lose their house and any other assets because of this.

SAMPLE CASE

Imagine a couple, both aged 67. They have done well, and saved up a substantial nest egg for their retirement. The man becomes ill and must be given care either in a nursing home or in-home. This is very expensive. In 7 years, they have depleted their retirement savings to pay for his care. Medicare would not step in, because Medicare is basically a program for the poor. Now, at age 74, they are poor. They have no more assets, and he is transferred to a lower class Medicare facility. Meanwhile, the wife is left with no assets, and probably trying to make ends meet on social security checks. They have had to sell the house they owned in order to liquidate all assets before Medicare would step in, so she is renting an efficiency apartment. Things are not easy at all. This is not how retirement was supposed to be.

Now, imagine that couple had invested in long-term care insurance. The expenses of in-home or nursing home care are covered in full or to some significant degree, depending on the policy they chose. Now she has the freedom to choose a high class facility for her husband to get excellent care, or perhaps in-home care if possible. Their retirement nest egg is untouched by the illness. Instead, it is there as intended, for them to draw a monthly income and live their retirement to the fullest.

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