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LTC Bullet:

Kiplinger's Guides Readers on LTC Insurance

Tuesday July 6, 1999


Well-respected and influential journalist Mary Beth Franklin reports on planning ahead with long-term care insurance in the July, 1999 issue of Kiplinger's Personal Finance Magazine.

In her article, "Insuring Against Life's Frailties," Franklin provides important information and advice to follow when considering whether and when to purchase insurance. Below are excerpts from the article:

"Like the urban myth of alligators in New York City's sewers, many people believe Medicare will pay for their long-term care if they ever need it. It won't, except for up to 100 days of nursing care following a hospital stay. Long-term care often involves nonmedical help with daily tasks, such as bathing, dressing, and moving from a bed to a chair. Medicare won't pay for that, and neither will your Medigap policy or regular health insurance."

* * * *

"Assisted-living facilities--an increasingly popular housing option for seniors who need help with meals, transportation and some daily tasks but who don't need constant medical supervision--are less costly...[than nursing homes] but are generally not covered by medicaid (the federal-state health care program for the poor).

"Given a choice, most people prefer to receive care in their own homes--another option seldom covered by medicaid. Purchasing long-term care insurance with the right benefits means you can decide where you will receive care while protecting your life savings."

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"By the time most people start thinking about long-term care insurance in their sixties and seventies, the cost may be prohibitive or they may have serious health problems that render them uninsurable. As with most kinds of life insurance, the younger you are, the cheaper it is to buy coverage. Of course, that also means you could be paying premiums for decades before you use the benefits. In most cases, however, you pay less in premiums over your lifetime if you start at a younger age than if you pay a higher premium for fewer years." [Franklin provides examples in the article.]

Franklin also includes powerful first-person accounts of the difference long-term care insurance has made in people's lives. Below is one example excerpted from the article:

"Barbara Pagani of North Caldwell, N.J., watched her father suffer with Alzheimer's disease, wiping out his life savings in the process. Determined not to let that happen to her, she persuaded her husband, Nicholas, to buy coverage for himself in 1990. Two years later, she bought a policy for herself. In 1997, Nicholas developed life-threatening complications following heart surgery and was later diagnosed with cancer.

"'As terrible as things were in our lives and as sick as he was, at least I didn't have to worry about the money,' Barbara says. 'There was not a cent that came out of our own pockets.' Nicholas's long-term care policy paid for round-the-clock home care, which cost about $30,000 before his death last February. 'Those expenses would have eaten into the college funds we were putting aside for our daughter,' Barbara says.

"Pagani is so convinced of the value of long-term care insurance that she is increasing the length of her own policy from six years to lifetime coverage....'It's a heavy-duty premium, but when I see what it can save me and the peace of mind it gives me, I'm going for it.'"

Mary Beth Franklin, "Insuring Against Life's Frailties," Kiplinger's Personal Finance Magazine, Vol. 53, No. 7, July 1999, pps. 78-82.