Got an Elephant in Your Room?
Okay, you are in your fifties, your parents are in their seventies living several states away and everyone is in good health. Statistics show every generation living longer than its predecessor...all good news. However, from time to time a thought crosses your mind: How do I handle the situation if mom or dad reaches a point where someone is needed to help at home due to mom's or dad's failing health? Then you push that thought aside, saying to yourself you will cross that bridge when you come to it.
As time passes that thought becomes an elephant in your room...[from Wikipedia: " 'Elephant in the room' is an English idiom for an obvious truth that is being ignored or goes unaddressed. The idiomatic expression also applies to an obvious problem or risk no one wants to discuss."]
Best way to make the elephant disappear is to confront the problem and resolve it...but that isn't news to you. Your problem is not lack of will to confront the elephant. It's procrastination. Most of us are professional "putter offers", after all. You can climb over the procrastinatrion barrier by calling your trusted insurance advisor...today. Explain your concerns and you may be rewarded with several answers to your worries about taking care of mom and dad.
First making the scene in the late 1980's is an insurance product called Long Term Care Insurance (LTCI). The idea behind LTCI is to provide the cash to pay for someone to come to their home during the day to help mom or dad with their "daily activities"* if either should need help due to failing health or accidental injury. As the great majority of us want to remain in our homes as long as possible, even when no longer able to function 100%, LTCI provides the cash to make that possible.
LTCI also provides the dollars to pay the bill if mom or dad moves into an extended care facility where they can receive care twentyfour hours each day.
Medicare does not cover most long term care costs. Recent health legislation attempted to address that issue, (see Community Living Assistance Services and Support Act, "CLASS" Act). In late 2011, a government audit deemed the CLASS Act unworkable and it has been shelved.
If your financial circumstances allow, you might consider pre-funding thirty-six (36)** months of LTCI benefits using a guaranteed single premium deferred annuity. That way, if the funds are needed, the cash is at your finger tips. If they are not needed, those dollars can be passed to your heirs. (You could also set up a trust to hold the cash, but employing such would not be as financially attractive as an annuity.)
Several insurance companies offer a Life Insurance product designed to meet LTCI needs. Those provide the attractive options of Life Insurance plus a method to pay out portions of the death benefit early when an insured person becomes LTCI claim eligible. Premiums for these plans are often less than those required of traditional LTCI policies.
When help with care for Mom and Dad (or You) is concerned, insurance options provide sound ways to make that elephant in your room disappear. Call you insurance professional today to talk about it.
* Activities of Daily Living include eating, bathing, dressing, continence, toileting, and transferring without substantial assistance from another individual. To be claim eligible one must be unable to perform any two of the above activities. If one suffers from substantial cognitive impairment, that alone can satisfy the claim-eligible requirement.
**Most LTCI claims continue about three (3) years; a few longer than five years. Google Long Term Care Statistics to view more data on that subject.
Copyright © Ken Smith - Insurance Planning Services