Middle-aged people are being forewarned in various publications—almost on a daily basis—that they need to invest in Long Term Care Insurance, or they are likely to put their families through unnecessary hardships. Yet, only a small percentage of eligible individuals are investing in Long Term Care.
request a (free of cost) price quote now >>

One of the arguments against Long Term Care insurance is "why don't I just invest my money myself, and if I never need post-hospital or extended care, my family will get the money rather than a company?"

Investment savings probably won't be enough
It's a good argument and one that might make sense if you started investing via a 401K or IRA very early in life, and if you invested a large portion of your income such that you will have at least a million dollars once you retire. If, however, you invested moderately, and will have only a few hundred thousand, you are deceiving yourself and endangering the health and finances of your family as well as your own finances and legacy if you neglect to plan for your care in your senior years (the average middle class wage earner has less than $500,000 in an IRA or other retirement plan).

The national average for nursing home care is currently $72,000 per year. Three to five years in a nursing home would wipe out the average IRA—leaving nothing for the family at home to live on during that time period. Furthermore, it is no longer possible to simply transfer all the money to your family and assume Medicaid will pay the bill. The government has the right to "look back," count all transfers including gifts to your grandchildren, and penalize you for the amount of money you could have spent on your own care. Thus, your family will have to pay the bill out of the money you tried to give them.

You're likely to live longer—but with illness
Laura Moore, senior vice president for long term care insurance at John Hancock, says "Americans are not facing the realities of what lies ahead, especially the potential need for Long Term Care." Furthermore, the Alliance for Aging Research reports that by age 65, nearly 9 out of 10 Americans will have at least one chronic condition. However, people will not die from these conditions—at least not any time soon. For proof, consider the fact that all life insurance companies recently had to update their mortality tables to the most recent 2001 federal mortality table. The result was a drop in life insurance rates for people over 65—because many people are living into the late 90s, and triple digit seniors are becoming more common every year. Yet, these aged people are usually not living at home, functioning independently, and managing their own affairs. The majority of them are either in nursing homes—where they have been for some time—or are being taken care of by their children, the latter with devastating consequences.