My mom suffered from Alzheimer's before she passed.  In the early stages, she moved in with my brother and his family.  They were able to help with her daily activities.  But as her disease progressed, they were not able to provide the care she required.  We had to find a nursing home for her.  My family was "baptized by fire" when it came to learning about long-term care.

Long-term care is something that none of us really want to think about.  But not only do we need to think about it, we need to make some decisions.  Facts are facts, and here are a few you should consider:
• 40% of us will need long-term care at some point in our lives after reaching age 65;
• Approximately 14% of people over the age of 71 have Alzheimer's, which often leads to a stay in a nursing home;
• Long-term care is just not for older folks.  Young people may need long-term care because of an accident or illness.

Long-term care refers to the ongoing services and support needed by people with chronic health conditions or disabilities.  There are three levels of care:
• Skilled care, which is provided by health care professionals and is generally round-the-clock care.  Nursing homes fall into this category of care.
• Intermediate care, which is provided by health care professionals, but is often accomplished by in-home visits.
• Custodial care, which is personal care given by family members or home health workers providing help with our activities of daily living (ADLs) such as eating, bathing, and dressing.

It's easy to understand why many people put off planning.  None of us want to think about losing our independence.  But, like most things, some planning now will leave us with more options in the future.

Right now, the average annual cost for a one-year stay in a nursing home is more than $65,000 and is higher in many states.  And, like other health care costs, it's getting more expensive.  Many believe that Medicare will pay for their long-term care.  But the truth is that Medicare provides limited coverage.  Medicaid will pay for some nursing home care, but only limited coverage for home health care in many states.  And you must qualify for Medicaid, which means that you can only have limited income and assets. 

Mom had virtually no assets and no income, so a Medicaid facility became our only choice.  We quickly learned that there is a big difference in the quality of a "Medicaid" facility versus a private pay facility.  Remember what I mentioned earlier about how planning can expand your choices? 

Largely due to that personal experience, my wife and I both have long-term care insurance policies which will provide funds in case we need long-term care.  We want to protect our assets against the potential cost of a nursing home stay and keep as many of our options open as we can.

Should you own long-term care insurance?  It depends on your personal situation.  But buying long-term care insurance is not easy.  It requires becoming familiar with a new vocabulary.  Terms like benefit amount, benefit period, elimination period, inflation protection and the different types of facilities the policy covers are just a start. 

As a fee-only Certified Financial Planner®, I do not sell long-term care insurance, or any insurance for that matter.  However, I do speak the language.  So, for clients considering whether to purchase coverage, or a specific policy, I make myself available to help guide them through the process.  As a neutral third-party, I can help them make an informed decision about such an important issue.

The end of the year is a great time to make sure your financial house is in order.  Having a frank discussion about your long-term care options should be a part of that process.