Does Someone With Long-Term Care Insurance Need An Asset Preservation Plan?

In this Elder Law Minute, Wes Coulson, Southern Illinois Elder Law attorney, explains why people with long-term care insurance will still benefit from having an asset preservation plan in place to help protect their life savings from the potentially devastating high costs of long-term care.

Transcript:

Hi, I’m Wes Coulson and this is your Elder Law Minute. Today, I want to address the question of whether someone who has long-term care insurance should also consider legal planning to protect their assets from being lost to long-term care costs.

Let me answer it this way: If you are one the very fortunate, very few, who have a long-term care insurance policy that provides a lifetime benefit with a benefit amount that’s large enough to cover all or most of your nursing home costs, then no.

Now, unfortunately, I just described what’s only about two percent of the policies that are out there. The other ones have limitations. Two big limitations: First, the term of coverage (how long they will provide benefits for) and second, the amount of the daily benefit.

Now, if you have a policy that only provides coverage for say three years, you may run out of that and still have a need care. Or, what I also see a lot is people will have that amount of benefit and they need home care or they need assisted living care, they don’t know whether they will wind up in a nursing home yet or not, but they’re afraid to use their benefit because they don’t want to run out before they get to the nursing home.

If you’ve done legal planning to protect your assets, if you later need nursing home care, you help guarantee getting the bang out of your buck for your insurance by being able to use it sooner. Second, that limitation on the amount of the benefit. We see a lot of policies that provide, let’s say $100 a day in coverage, that probably seemed pretty good when the policy was bought 10, 15, 20 years ago. But, nowadays, not uncommon for nursing homes to run in excess of $250 a day. So, if you’ve got $3000 a month in coverage and $7500 in nursing home care costs, you still have a problem that you need to address if you want to keep from losing your life savings. Legal planning can do that.

The two in combination, legal planning and long-term care insurance, can provide a very effective means of protecting you from long-term care costs. Last little thought on that, that I like to tell people when they say, “Well, isn’t that redundant?” You know, sometime redundancy isn’t a bad thing and if that weren’t the case, then we could get rid of three of the four of the Army, Navy, Air Force and Marines. We haven’t done that, we are ever going to do that, because we realize that being comprehensive is key to being protected. Thanks.

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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618)632-7000 or (314)567-9292 or Contact Us and we will get in touch as soon as possible.