It is important to understand the benefits of long term care insurance and how it can be used to help protect your family and finances, as well as help to avoid placing the same caregiving burdens on the next generation. Most people envision themselves living a long life, investing and planning throughout their working years to create a financially secure feature where they can enjoy spending time doing the things they enjoy the most. As part of your financial planning process, it’s important to understand the potential impact that needing long-term care may have on your assets, your family, and your future.

First of all, long-term care can cost $50,000 to $100,000 a year. In 30 years, the annual cost of long-term care may be as much as $250,000. Also, Medicare and traditional health care insurance do not pay for long term care. Without a long term care insurance policy, you are essentially “self insuring” your risk of paying for care. While wealthy individuals may have the financial means to cover their costs for care, this is not a viable strategy for the majority of people. Whether people overestimate their ability to pay for care over an extended period, or convince themselves they’ll never need care, the risk of needing and paying for care remains.

If you’ve ever been in a caregiving situation , you understand the physical and emotional toll it can take. While providing care to loved ones is an act of compassion, placing these burdens on spouses, children, and other family members can create a significant emotional and physical strain, and is something many people would to avoid.

Waiting to address your long-term care needs – until the point at which you actually need care – may significantly impact your financial situation, your quality of life, and your ability to maintain your independence. Incorporating long term care insurance into your financial plan can help protect your assets, reduce the burden of care that would otherwise fall on family members, and enable you to receive care in the setting you or your elder most prefer, including the home.

Long term care insurance picks up where traditional health insurance leaves off. This can cover the costs associated with injuries such as: auto and motorcycle accidents; accidents skiing, horseback riding, or diving; extreme sports; fractures; and falls. It can also help cover the care associated with long term conditions, such as strokes, heart attac...

The rising cost of long term care, abetted by depressed home values, is taking a bigger bite out of American homes today than in 2005, according to LTC Financial Partners , one of the nation’s most experienced long term care insurance agencies. The rate is up significantly from five years ago when two square feet were consumed.

Five years ago LTC Financial Partners started translating long term care costs into square feet of real estate, to highlight the heavy burden of paying for care. The agency developed the estimate based on the following facts:

The national average annual cost for a private room in a nursing home is now $79,935, according to the latest MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, released in October, 2009. That’s about $219 a day, up from $190 in 2005.

The National Association of Realtors reports that the median price for U.S. homes is currently $183,700, according to their latest survey. With an average 2,422 square feet per home, according to the U.S. Census Bureau, that equals $75.85 per square foot, about enough to pay for a third of a day of nursing home care .

Some homes are “eaten” much faster than the median rate . Unfortunately, the less a home is worth, the bigger the relative LTC bite; it can be much higher than three square feet per day. For example, consider a 1,286 square-foot home for sale at $33,300 in Pennsauken, NJ. It would be “eaten” at the whopping rate of 8.46 square feet a day! If you don’t qualify for Medicaid and you’re not protected by long term care insurance , you need to realize that for every day you’re incapacitated, or a family member is, there goes another sizeable chunk of your home.

When you reflect on how quickly care costs are eating up our home equity, the question naturally arises, “What can we do about it?” Long-term care insurance is the answer for millions. It protects your home and your savings, and the right policy can be very affordable.

For people who do not want long-term care insurance, or do not qualify for health or other reasons, a reverse mortgage can be a solution. It lets you tap the value of your home to pay for care, with no monthly mortgage payments while you live in your home.

Information about long-term care insurance and reverse mortgages can be obtained from LTC Financial Partners at www.ltcfp.com . 

You may respond to Linda Lee in the “Leave a Comment” section below or email her at lkaye@boomer-living.com .

In caring for both her father and her father-in-law over several years, Linda Lee directly experienced the damaging impact that providing long-term care to family members without the benefit of long-term care insurance can have on the preservation of financial assets and the emotional well-being of survivors. The sudden death of her husband at age 55 further reinforced the import...