Find your parents’ Long-Term Care Policies so you can help them plan

There is plenty of debate about the benefits and drawbacks of buying long-term care insurance.  The premiums are expensive for a person in their 70’s who is first considering a purchase. Potential buyers worry that they will pay premiums for years and never have to use the policy. The industry has been in flux and there aren’t too many carriers around. What I do know is that over the years, long-term care insurance policies have been a lifesaver for many of my clients, particularly if the policy pays for in-home care. The annual premium cost has always been well less than a single month in a nursing home. So LTC policies can be an important component of long-range planning for a person who will eventually enter what I like to call “the elder zone.”

All too often, the need for 24/7 care drops on the doorstep when there’s been no prior planning, and concerned family members are faced with making arrangements without any good information. Elsewhere on this Blog I’ve written about strategies such as assembling the team, compiling your financial & insurance data,  and getting legal help for an updated estate plan and power of attorney. Today I suggest that you dig out those long-term care policies from wherever they are being stashed, read them and get familiar with what the policies provide. Contact the company for an updated statement of benefits. What’s the daily rate? Compare that to the anticipated cost of care  in a nursing home ($350+ in most places) or at home ($165 /day or more). Ask questions about what it takes to start the typical 90-day elimination period — what documentation is required? Can it start when the patient enters the hospital if s/he will then transition to long-term care? Can it start if the patient has already had an in-home Aide who was paid off the books? Find out if premium payments can be switched to auto-debit from the checking account, to avoid the risk of lapse if the policy-owner starts forgetting to pay bills.

The Medicaid home care program under MLTSS/HCBS  does not provide 24/7 full-time care. Knowing what the benefits are in your parent’s  long term care insurance policy can make a huge difference in how you approach the discharge planning from hospital or “rehab” back home for senior planning. It may be the ticket to asset preservation.

Call us for advice about long-term care planning and asset protection for peace of mind …. 732-382-6070

Start your long term care planning before the reverse mortgage is used up

I have encountered the following crisis too many times. A frail elder is living at home, and since the home is safe and nice, is happily aging in place. Once the homeowner reaches the point of hiring a home health aide, they start using  up their savings. At that point, they  place a reverse mortgage on the home. This provides a significant amount of cash that can be drawn out month after month to enable her to stay at home. It can be drawn down gradually like a line of creditSo far so good. 

Someone needs to be minding the store to make sure that planning for the next phase begins well before the homeowner has exhausted the cash that’s available through the reverse mortgage.If the homeowner starts to develop Alzheimers dementia and has no one standing by to help, there can be a real crisis when the funds run out.

I have had several cases where the homeowner required 24/7 care, but the homeowner didn’t ask for help from their power of attorney, or the agent under power of attorney didn’t realize soon enough that the reverse mortgage was exhausted.  There was no money to pay for an aide, and even an MLTSS/ Medicaid application could take months to process and wouldn’t provide 24/7 care at home. To get into a nursing home would be practically impossible at that point. Fortunately, we were able to work things out. But it was a major crisis for all involved, and totally avoidable.

Careful planning can prevent a crisis!

Call us about elder care planning and aging in place … 732-382-6070