Due to age or a medical event, we may need help with performing the activities of daily living, feeding, bathing, dressing, grooming, toileting or mobility, either in our home or in an assisted or skilled care facility. At home, we may have family members available to provide the assistance we need. However, that requires them to take time off work, and so respite care is required. The question is how can someone afford to hire someone or move into a facility.

 

There are several options available to cover the cost: self-funded, long-term care (LTC) insurance, life insurance with an appropriate rider and an annuity with an appropriate rider.

 

Self-funded is simply spending personal funds to cover the cost. If they become exhausted, individuals may be eligible for Medicaid.

 

A LTC insurance policy is available through some companies. The insured pays a monthly premium for defined benefit amount and period. The policies require answering health questions, medical underwriting, and the premium can increase. LTC insurance policies are a “use-it-or-lose-it” product, and there is no benefit paid when we die.

 

Life insurance varies by company regarding their LTC payment structure. They may have riders, or optional coverage, to provide a benefit. Like an LTC policy, it will have a defined benefit amount and period.

 

Annuities also differ between companies on payment structure. Some will increase the amount of the payout for a defined benefit period. If we outlive the benefit period, the annuity payout returns to the “normal” amount if there is remaining principal. Some companies have a lifetime payout for the LTC benefit. This product can also have a spousal benefit option covering both partners.

 

This is a complex issue, and working with a professional can help make an informed decision on which option is best.

 

For more information, contact Anthony Acri, RSSA, licensed in DE MD NC NJ PA and VA, at 717-345-4888 or visit AcriAgency.com.