Protecting loved ones from Nursing Homes
By Steve Gaito
If COVID-19 has taught us anything it is that being in a Nursing Home is not an ideal place when there is a pandemic. Recently I was providing a lunch and learn, and we were discussing Long Term Care. I asked the people attending what was the first thought that came to their mind when they heard the term Nursing Home. #1 response was the smell, #2 was the food, and surprising to me, #3 was it was not a place you wanted to be when a pandemic happens. The statistics of deaths attributed to COVID-19 to Nursing Homes are staggering. It is a combination of compromised immune systems and in the case of COVID-19 an incredibly contagious virus. Now I doubt that any person intentionally plans to spend their final years of life in one of these institutions, but without proper planning, it is exactly what happens. In NC, the cost of 24/7/365 skilled care has exceeded $100,000 and I have clients that tell me that they are paying much more for parents that have either Alzheimer’s disease or dementia.
At almost every seminar I discuss the ways to pay for Long-Term Care. It is usually one of the more responsive parts of my seminar as those attending have either had direct experience with their parents or they know someone that has gone through it. It is real to them. They know how expensive it is and what it can do to the surviving spouse. What they do not know or have misinformation about is how to best cover this risk. Most people have chosen to self-fund the expense. If traditional Long-Term care were the only option, I could possibly justify this method, but there are so many other more efficient ways to cover the cost. There are 5 ways that most can cover the cost.
- Self-Pay or pay as you go.
- Traditional Long-Term Care (Like Homeowners Insurance)
- Life Insurance Rider
- Asset-Based Long-Term Care
- Annuity with Doubling Income Feature
There are pros and cons of each and usually an option for every budget. In my opinion, anything is better than nothing. In my last seminar, I got asked the question about if you have enough saved is it not best to just pay for it out of pocket? My answer is if you can qualify the Asset Based LTC is a more efficient way to pay for your care. You already have the money allocated or at least should have it allocated, so why not leverage it, and if you do not use it pass it along to your heir’s income tax-free. Once I show the illustration and the client understands the benefits, they love these plans.
The second question that I get is what if I cannot qualify for the asset-based plans? This is where the Annuities come into play. They also come into play when people need income and Long-Term care coverage. Recently there has been a new product that provides income and if you have 2 of the 6 ADL’s (activities of daily living) your income base doubles for up to 5 years. Since the average stay is between 2-4 years this is an attractive benefit.
As someone that specializes in helping people evaluate Long-Term Care options, I believe that I can help you understand your options and help you get the coverage you need. I promise that I will do my best to keep you from putting your loved ones through the trauma of seeing you in a Nursing Home and come visit you in your own home.
To schedule your free initial consultation, go to my website and schedule a time. www.retirerm.com
Steve is the owner of Faith-Based Health Care and Retirement Resource Management. He is a National Speaker on the topic of Social Security optimization, quoted in national publications like Money Magazine, US News and World Reports, and Fox Business. Steve loves to educate and teach on financial topics like taxation of retirement accounts, long term care, healthcare, and efficient savings plans for small businesses. He has provided financial planning for missionaries through the International Mission Board. You can find Steve at 68 South Main St. in Marion, NC by calling 828-559-0299, email firstname.lastname@example.org or visit his website at www.faithbasedhc.com.
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