Is Long-Term Care Insurance Worth a Second Look?
Americans are living longer compared to historical statistics (although maybe not healthier). The U.S. Department of Health and Human Services states that 70% of people turning 65 today will need some type of long-term care during their remaining years.1 With longevity on our side and uncertainty about the future cost of healthcare, it may be prudent for high net worth individuals to review the option of long-term care insurance, and if appropriate, add a policy to their toolkit for retirement and/or long-term planning. Longterm care insurance (“LTCI”) is insurance which pays for a range of healthcare services and support functions when an individual is no longer able to independently meet his or her personal care needs. These functions are considered “Activities of Daily Living” and consist of eating, bathing, dressing, toileting, transferring and continence. As it is a difficult scenario to address, most people tend to ignore the planning for what will happen to them in their later years of life — be it living in an assisted living facility, paying for home health care personnel in the privacy of one’s house, or having family members come to their aid. All of these are viable options, since most high net worth individuals (a) are typically not eligible for Medicaid; (b) have limits placed by Medicare on its payment of or reimbursement for long-term care facilities and (c) likely have ample liquidity now that one assumes can cover for care later. For those who would prefer to leave those liquid (and other) assets to family members and/or have peace of mind concerning personal healthcare payments for the future, LTCI may be worth a second look as you review your estate plan with your insurance broker, tax expert, or Family Office advisor. LTCI should certainly be addressed if there is a history of long-term illness in the immediate family, a current disability exists, or possibly if one is single and does not have relatives close by.