Consider Exploring Long-Term Care
By: CANDACE BAHR - For the North County Times

Last modified Saturday, March 13, 2004 10:06 PM PST

My husband, John, and I just bought a long-term care policy. I'm 50, he is 51. It seems the right thing to do at this
stage in life.

For years, I have suggested that my clients buy long-term care insurance. But when it came our turn, the decision
wasn't that easy. We felt too young. The premiums seemed too high. Why pay for something we hope we never use? Now, I
understand why many consumers avoid the task and end up woefully unprepared for the care they may need in their later
years.

We had a personal family experience that was a powerful motivator. My father recently passed away after a long bout
with Parkinson's disease that required a 2 1/2-year stay in a nursing home. At $85,000 a year in nursing home expenses,
my parents' once carefully tended portfolio was getting trashed.

They had purchased a long-term care policy from a friend years ago. Sadly, it covered very little of my father's
expenses. Perhaps if my parents had better guidance, they wouldn't have been blind-sided.

That is why, although I am licensed in long-term care myself, I always refer my clients to independent agents who
specialize in the LTC area.

You have got to get expert advice.

With long-term care, you are buying something today that hopefully you won't need for an additional 20 to 40 years, if
at all. That means you won't necessarily know how good (or bad) your agent is until decades into the future, so it's
imperative that you choose someone who is competent and you can trust. Ask for recommendations from other
professionals, such as your CPA, attorney or financial adviser. (I don't usually suggest asking your friends, simply
because often they aren't completely clear on what they bought).

There are lots of factors an LTC specialist will help you evaluate, including your current age and health, your future
needs and your budget. Don't be surprised if choosing a policy feels overwhelming at first. But at the very least, make
sure you clearly understand the following four factors:

Benefit amount: It's important to get this one right. Today, the basic cost of care is $180 a day; work forward from
there.

Deductible and elimination period: The higher your deductible, the lower the premium. Most people choose elimination
periods (the time you pay for your own care before the policy kicks in) of 100 days or less.

Inflation: Do you want a simple or compounded inflation rate? If you can afford it, go for the compounded rate of at
least 5 percent per year.

Benefit period: This is the amount of time the insurance company must pay. Consider this: The average stay in a nursing
home is three years. But most people will need serious home care for years before they need to enter a nursing home.
Plan accordingly.

Terms and pricing can vary significantly from one policy to the next , so be sure your policy is tailored to meet your
needs. Although the premiums may seem steep today, an investment in LTC can save you tens of thousands of dollars in
the future and ensure that you will receive the best quality care available.

Candace Bahr is a nationally known author and financial adviser in Carlsbad. She is co-founder of the nonprofit
http://www.wife.org

SOURCE: North County Times, CA
http://tinyurl.com/2stvg

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