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Author: MEG Three stars, 500 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Nursing Home insurance Date: 11/14/2003 8:14 PM
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Hopefully I am posting this on the correct board.
I like this board a lot and the information it you all provide.
here goes:


My Widowed Mother- in- Law has a “paid for” home (value $110,000)
An Ira ($65,000) with designated Beneficiaries.
Approx $180,000 in a brokerage acct (in her name alone)
Some variable annuities approx $80,000, with designated beneficiaries.
Some liquid day to day cash $20,000 (not in the brokers hands)
Social Sec income approx $1300/month.


She is investigating Nursing home insurance.
She is 73 yrs old and in pretty good health.

She does not want a Nursing Home to take all of her assets; she wishes to pass everything on to Her daughters (three).

Her home is titled with LIFE USE. It would go to her daughters if she no longer could care for herself.

The broker wants her to look at the home insurance as a way if protecting the acct that has the $180,000 value.

He says that the premiums could be paid from the annuities accumulations since the accumulations would be taxable to heirs anyway. Not sure yet what premiums would be or how much the annuities have accumulated.

Any ideas on this or any better ideas.


MEG
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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37841 of 76418
Subject: Re: Nursing Home insurance Date: 11/14/2003 8:59 PM
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MEG asks,

The broker wants her to look at the home insurance as a way if protecting the acct that has the $180,000 value.

He says that the premiums could be paid from the annuities accumulations since the accumulations would be taxable to heirs anyway. Not sure yet what premiums would be or how much the annuities have accumulated.

Any ideas on this or any better ideas.


This sounds like a weak/marginal case for buying long-term care insurance.

TMFPixy wrote a good series of articles on the subject about 2 years ago. Perhaps he can provide a link. I can't seem to find it on TMF.

intercst

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Author: TTRoberts Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37844 of 76418
Subject: Re: Nursing Home insurance Date: 11/14/2003 11:45 PM
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MEG, you asked:

<< My Widowed Mother- in- Law has a “paid for” home (value $110,000)
An Ira ($65,000) with designated Beneficiaries.
Approx $180,000 in a brokerage acct (in her name alone)
Some variable annuities approx $80,000, with designated beneficiaries.
Some liquid day to day cash $20,000 (not in the brokers hands)
Social Sec income approx $1300/month.


She is investigating Nursing home insurance.
She is 73 yrs old and in pretty good health.

She does not want a Nursing Home to take all of her assets; she wishes to pass everything on to Her daughters (three).
>>

Buying some LTC (Long Term Care) can surely help preserve some of it. But, at her age, it's going to be a little costly for LTC coverage and her asset level, as you've described it, may not warrant such an expense. If she had quite a bit more assets than this, then it would surely be worth looking into. One is going to have to take a very close look at the number to see if it's really worth it.

<< Her home is titled with LIFE USE. It would go to her daughters if she no longer could care for herself.

The broker wants her to look at the home insurance as a way if protecting the acct that has the $180,000 value.
>>

It may be a good idea to look into other alternatives. . . which may include a plan for gifting some of her assets away NOW.

<< He says that the premiums could be paid from the annuities accumulations since the accumulations would be taxable to heirs anyway. Not sure yet what premiums would be or how much the annuities have accumulated. >>

Setting up an annuity to pay the premium can work to a certain extent. The main problem with such a plan is that annuity income if fixed and the premiums for LTC coverage is not. So, one needs to consider what to do when LTC premium increase . . .and they will over time.

<< Any ideas on this or any better ideas. >>

It would be a very good idea to see out a good experienced Elder Law Attorney for this kind of planning. Yes, such an attorney will cost some money. But the benefits will most likely outweigh the cost. And you'll likely find that there's more than one way to skin the cat.


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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37846 of 76418
Subject: Re: Nursing Home insurance Date: 11/15/2003 7:26 AM
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>>Any ideas on this or any better ideas.<<

Buy an annuity so you can buy LTC. Sounds like a great idea for the insurance agent.

You and your family should go to a nursing home which has mainly Medicare patients. Personally I would prefer to use all my assets to avoid such an occurence.

buzman



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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37847 of 76418
Subject: Re: Nursing Home insurance Date: 11/15/2003 8:49 AM
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Intercst writes:

This sounds like a weak/marginal case for buying long-term care insurance.

TMFPixy wrote a good series of articles on the subject about 2 years ago. Perhaps he can provide a link. I can't seem to find it on TMF.


That series of six articles now resides in the 2000 archives at http://www.fool.com/retirement/retireeport/2000/retireeport2000.htm beginning with the January 31, 2000 item entitled "The Spectre of Long Term Care." Although the dollar numbers are now out of date, IMHO the thrust of the series still pertains.

Regards...Pixy


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