Long Term Care Insurance and the monster under your bed

Many people list outliving their money as their greatest fear, but few are willing to lift the covers and coax that monster out from under their beds. “I’m not going to think about it,” they say to themselves on the toss-and-turning nights they spend doing just that. “If I don’t think about it, it won’t happen to me.” It does happen, though, and more often than they think. People who haven’t planned well do run out of money and, as a result, lose control over some choices they’ve taken for granted such as where to live, what to eat and how to spend their free time. The average cost of assisted living in Wisconsin is $4,004 per month, and, even if you’ve settled yourself comfortably into an assisted living facility, established great relationships with the staff, made friends and looked forward to the excursions and weekly Tai Chi, you will not be able to stay if you can’t make those payments. Medicaid does not pay for assisted living. It does pay some costs of nursing home care, but only for those who qualify financially. The average cost of nursing home care in Wisconsin is $8,430 a month, with costs rising an average of 3% annually. Would your budget withstand an $8,430+ hit each month and, if so, for how long? In the past, the only choice for people who wanted to protect themselves from skyrocketing nursing home costs was Long Term Care insurance. While these stand-alone policies remain valid options for some, they do not appeal to everyone. Many express concerns about pouring so much money into a policy on which they may never make a claim. Self- funding is an option, but only for those who can set aside nearly $2 million for that purpose.  To generate $101,160 per year at 5% rate of return you would need $2,023,200 in order to maintain principal year after year. As strong… | Read More »