No. of Recommendations: 4
I think long term care insurance is most useful to those who want to protect assets of the surviving spouse when one enters a nursing home. But we do hear the insurance companies issuing the policies have underpriced them and are now raising prices to try to catch up. Hence, expect premiums to continue to rise. And some may become unaffordable.

For those that are attempting to accept the spouse's assets, you need to be aware that there are long term care policies that have time and/or benefit limits. And there are also ways to protect assets other than using long term care policies.

My aunt has been in long term care with Alzheimer's for 5 years. She and my uncle saw both of her parents live out the last several years of their lives in long term care facilities with Alzheimer's, so they knew it was a strong possibility for her. My aunt and uncle purchased long term care insurance, and he was able to put her into a very nice care facility (that doesn't accept Medicaid) when he could no longer care for her, about 5 years ago. She has deteriorated to the point where she no longer recognizes anyone, including him and their kids, and mostly lays in a fetal position all day. Their long term care insurance is approaching the end of the benefits that it will pay, so he's going to have to move her out of her current facility into a facility that accepts Medicaid, or pay for the care himself out of their assets.

He's choosing to move her into a facility that accepts Medicaid recommended by staff at the facility that she is currently in. It's also a nice facility, although not as nice as her current one. He's able to do this because he also protected their assets by putting them in trusts that protect assets from Medicaid claims in his state. If they had wanted to, they could have forgone the long term care insurance, but she would not have been able to stay in her current facility for as long as she has. The long care term policy did cost some of their assets, but not as much as putting her in that facility for 5 years would have cost them.

I would strongly recommend that anyone who is purchasing long term care insurance, especially those policies that have benefit limits (either time or dollar amounts) to also ensure that they also have their assets protected by trusts that will protect their assets from Medicaid claims in their state, if they believe that they will choose to use that option once the benefits are depleted. If they are willing to let Medicaid pay for all of the long term care, then they could choose to just set up the trusts.

AJ
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.