When the Home Caregiver is You

As part of a do-it-yourself financial plan to build wealth, you will find at some time in your life, you will have to be a caregiver– to a child who is ill, or a spouse who gets disabled or has a chronic illness- but most of the time it is a parent that is aging. We are all living longer. The heavy responsibility that goes along with being a senior caregiver is enormous . 70% of people over age 65 will eventually need long term care either at home or in a nursing home .

As a Financial Planner, I would either help plan for it (be the home caregiver) or purchase long term care insurance for all or part of the risk. Now, with so many losses from the stock market, many people of all ages are starting to take a serious look at long term care insurance  .  Some of the questions that I fielded from clients were :

What if I never need it? Now I have lost all that money in premiums.

What if I can’t buy enough of it?

What will happen when the benefits run out?

What if the insurance company keeps raising the premium?

How will I afford it in the future when I am not working?

Will the insurance company still be around to pay the benefits?

What if I want more home care coverage than skilled nursing care?

 The insurance companies have listened and they have come out with some innovative features to address your concerns
  :

Built-in premium on death feature which means that if the policy owner dies before 75 without making a claim, the surviving beneficiary will receive a percentage of the premiums.

Tiered solution benefit that sets up parameters at different ages for the type of inflation protection a policy owner can get. Up to age 61, for instance, their benefits could inflate by 5%, from 61 to 76 they could inflate by 3% and after 76 they wouldn’t inflate at all.

CPI based inflation features

Shared coverage by couples to reduce premium

Home care coverage and optional home health care riders

Additional increase in coverage over time without health exam to a maximum of double the original policy.

The number one reason someone buys long term care insurance is that they saw someone they love have a long term care event. Not having long term care insurance can rob a son or daughter of their career because of the burden of care giving for another . It protects them, and their inheritance as well as you. Most of the time the burden of care will fall on only one sibling .

It is hard to predict which company will still be around to pay out the benefits that you have invested for, so the younger you are, the better the company should be . That means the highest ratings at both AM Best and Weiss .

  I was under age 60 when faced with a long recovery from a car accident  .  My family could have saved over $55,000 in care-giving costs if I had long term care insurance . So I know firsthand the benefits of having this type of insurance. To build wealth you need to be prepared to self-insure or have adequate insurance . -Fern Alix LaRocca CFP® Wealth Coach