No. of Recommendations: 3
Hubby's life insurance policy will not be affordable after he reaches the age of 70 so maybe we will just look into LTC insurance.

I know you are retired, so I admit that I am surprised that you still have life insurance on either one of you. We are in our late 50's, and we cancelled our term life insurance policy last year as the kids are finished with college, we have reasonable assets, and we don't really need to replace either of our income streams at this point if something happens to one of us. So it was very easy for us to get rid of life insurance as it had always been the plan anyhow.

In my mind, I have much more use for LTC than for life insurance.

In order to get Medicaid to pay for the cost of a nursing home you have to get rid of all your assets years in advance and your income cannot exceed roughly $2,000 a month either.

This is not quite accurate. If you plan to give away your assets, then there is a 5-year (?) look-back period. This is to prevent people who have assets from giving them all away to their heirs so that Medicaid can pay for their medical expenses. I actually have no problem with this as Medicaid is supposed to be used to provide medical care for those people who are too poor to be able to provide it for themselves, and it is paid by our taxes. Medicaid is not supposed to be used by someone who has/had assets and wants to be able to give their money to their heirs so that they can then get free medical care on the taxpayer's dime.

If, however, you need medical care and spend down all your assets to provide that care, then Medicaid would kick in and there is no need for a lookback period.

Medicaid allows you to keep your house, even if you are in a nursing home, although once you die and it is sold, they have a lien on the house (and all other assets) to get reimbursed. If there is a spouse, then the spouse can remain in the house, and the lien won't generally kick in until the spouse dies or the spouse decides to sell the house, at which point Medicaid will want their money back.

Medicaid allows for final expenses, legal fees to settle the estate including executor fees and some medical expenses or nursing home expenses for the final days. Beyond that, anyone else stands in line behind them if there is anything left.

Medicaid also allows the spouse to have a car, and up to $2000 in cash in the bank. They recipient can also keep something like $90 per month (I don't remember exactly) from their pension or SS for personal expenses.

From what I know about you, I suspect you have enough assets to pay for nursing home care, but it could potentially leave a spouse without much, and so for that reason, you may want to look at a LTC policy. But you may find that you have enough to self-insure, and don't want a policy, or as you have suggested, it may make more sense to use the life insurance premium money for a LTC policy instead.

It is good to be asking such questions to understand what makes the most sense in your own situation.
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