Long term care planning involves a whole lot more than buying a long-term care insurance policy, which an increasing number of people see as too expensive.  Having a long-term care insurance policy may offer peace of mind, but is not a complete financial solution to the problem of getting old.  The financial cost of getting old begins long before long-term care insurance actually may help.

Long time readers know of my personal experience with the anguish of long term care planning, which I first wrote about August 14, 2013, and later on February 26, 2014, and March 6, 2014.   This week’s blog is informed by personal experience and conversations with clients.

The vast majority of people will see the end come after long medical struggle with an ultimately unstoppable condition, or else just the accumulating disabilities of old age.  Unfortunately, most will lose their independence gradually, but will want to stay in their own homes as long as possible.  To accomplish this they will need help from extended family and/or paid caregivers (which are in short supply).  The financial outlay often begins, and continues years before long-term care insurance may actually help defray the expense.   For example, most long-term care insurance policies pay benefits for “cognitive impairment,” but many set a high bar for actual benefit qualification. Thus, a substantial part of long-term care planning is wealth accumulation for discretionary use in older age.  The following articles provide background information and resources for further research.

A Better Way Out.  Surgeon Atul Gawande writes candidly about the limits of modern medicine and the problems of aging in his book, Being Mortal.  In contemporary societies old age and infirmity have gone from being a shared, multigenerational responsibility to a more or less private state—something experienced largely alone or with the aid of doctors and institutions.  According to the surgeon’s book, your chances of avoiding the nursing home are directly related to the number of children you have.  Having at least one daughter seems to be crucial to the amount of help you will receive.  In the absence of children, money can buy someone caregivers to help them remain at home.  One feature that nearly all institutions have in common is that safety takes precedence over autonomy, since they are designed to appeal to the residents’ children, not the residents themselves.  Elder care facilities might satisfy family members but ignore what really matters to the residents in question.  A life of safety isn’t the life most people really want for themselves. Survival statistics form a bell-shaped curve, in which there are a small number of people who survive much longer than expected—the tail of the curve.  Gawande believes that we have failed to prepare for the outcome that’s vastly more probable.  Click here to read the full article

A Primer on Long-Term Care Insurance.  360 Degrees of Financial Literacy, a free program of the American Institute of CPAs, answers your questions on long-term care insurance.  Click Here

A Shopper’s Guide to Long-Term Care Insurance. The National Association of Insurance Commissioners has written this guide to help you understand long-term care and the insurance options that can help you pay for long-term care services.  Click Here

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Disclosure – The articles mentioned in This Week with J. Mark Nickell & Co. are for information and educational purposes only. They represent a sample of the numerous articles that the firm reads each week to stay current on financial and economic topics. The articles are linked to websites separate from the J. Mark Nickell & Co. website. The opinions expressed in these articles are the opinions of the author and not J. Mark Nickell & Co. This is not an offer to buy or sell any security.  J. Mark Nickell & Co. is under no obligation to update any of the information in these articles. We cannot attest to the accuracy of the data in the articles.