What is the number one insurance policy you will use if you have it at the right time? Give up?
Life insurance. Hate to break this to you but there is a 100% certainty that you will die. If you have it at the time of your passing it will be used 100% of the time.
Ok now, what is the second (potentially) insurance that you will use? I know you didn’t get this one. You probably guessed medical insurance or car insurance or even homeowner’s insurance. But you would be wrong, the percentage of uses for the above is 50%, .5%, and .083% respectively.
Answer – Long Term Care insurance also known as Extended Care insurance. There is a 70% chance when you are over the age of 65 that you will need some type of coverage. Now you 40 to 60 years old listen up – 40% of this group is using it now! So don’t think this is ‘old folks’ insurance.
Let’s back up just a bit and learn just what is LTC/EC insurance.
LTC/EC coverage picks up where your health insurance stops. Your medical insurance is going to take care of your medical/health issues and LTC/EC is going to take care of your custodial care. What do I mean by that? When you are unable to perform unassisted 2 of 6 activities of daily living (ADL). What are those ADL’s? Here is the way I remember these. In the morning when you wake up you need to go from your bed to somewhere (generally speaking to the bathroom). That is called transferring – going from one location to another. And speaking of the bathroom that is the second activity, you must be able to do all the things associated with toileting. After that you probably head for the shower/bath. This is the third activity. You must be able to perform the necessities of personal hygiene (bathing). Then after getting cleaned up you put on your clothes. Activity number 4, you must be able to get your clothes on and off. Now that we are all clean and dressed, I’m hungry! This is the fifth activity; you must be able to feed yourself. And the last activity is remaining continence throughout the day.
So the six ADL’s are: Transferring, Toileting, Bathing, Dressing, Eating, and Continence.
Paying for such care is available in one of three ways.
1. Using your hard-earned cash.
2. Depending on the Government and spend down to be eligible for Medicaid (not Medicare) Note that Medicare does NOT pay for long term care.
3. Having LTC/EC insurance. And the number one objection to having LTC/EC insurance? It is a use it or lose it propositions. Until now!
Experts will tell you the best time to buy this coverage is age 50 to 60. I think that should be 40 to 64 and here’s why. There is a policy that if you buy coverage during this age range (and like all insurance the younger you are the less expensive it is) and you never use it they will return 3 times your paid in premium to your beneficiary. This is a game changer.
Imagine that for any of your insurances you have. Wouldn’t it be great to ‘rent’ that insurance knowing that if you didn’t ever have to use it – or even if you did – as long as the used amount is less than 3 times your premiums paid in, your beneficiary would receive at your passing a very nice benefit? For more information on all the other details call me and let’s discuss.
Ben Davis, III CSA 615-584-4946 [email protected]