Discovering The Mature Lifestyle
So what is Medicare anyway? Page 3
Medicare & Insurance
October 21, 2016
October Issue
Long-term care insurance helps protect your assets Long-term care insurance is not meant to handle shortterm stays. It’s for someone with Alzheimer’s or a stroke, or someone too old to care for themselves on a daily basis. Sue Turner
Sue Turner is a long-term care insurance s pecialist i n E agan. Turner has a finance deg ree f rom t he U niversity o f Minnesota a nd first worked i n m utual funds. Her specialty for the last 20 years has been long-term care insurance. She has more than 1,000 clients and is part of a net work o f s pecialists acr oss t he country. (Submitted photo)
BY SUE WEBBER CONTRIBUTING WRITER In eras past, fa milies assumed t hey would ca re f or t heir agin g lo ved o nes a t home, often nursing them through a long illness prior to death. Now, t hough, lif estyles ha ve c hanged, most fa mily mem bers a re w orking a nd many p eople consider long ter m care insurance, so they don’t become a burden to their families. Sue Turner, a long-term care insurance specialist for 20 years at Turner Insurance Agency Inc., in Eagan, said most of her clients tend to buy LTC policies when they’re in their 50s or early 60s. “They t end t o b e p eople wi th ass ets,” she s aid. “ If y ou wa it un til y ou’re 60 o r 70, t he p remium will b e hig her. I f y ou wait to buy until you’re 65 and you have a slight health condition, you’ll pay $5,000 a month for four years of coverage.” Whether you’re single or married, you can purchase a policy of any size to cover nursing ho me, assist ed li ving facili ty o r home health care when and if needed. The client stipulates in the policy how long the coverage is t o last. “ Most c lients st ay a t home as long as possible,” she said. Premiums run between $100 and $400 a month, Turner s aid. “You pick t he dollar amount of coverage you want, and you pick y our o wn facili ty; y ou ca n g o a nywhere in t he U.S.,” she s aid. “ The premiums are a function of your age, your health and the benefits you pick within the plan.” Noting t hat t he b ill f or n ursing ho me care no w st ands a t a bout $85,000 a y ear, Turner s aid, “ Ninety-nine p ercent o f c li-
ents do n’t p urchase a p olicy t hat co vers $85,000 a y ear. They ca n usuall y co ver $1,000 t o $3,000 a mo nth o ut o f p ocket and t he p olicy co vers t he bala nce. Y ou don’t need to be insurance poor.” However, an inflation rider is the most important pa rt o f t he p olicy, she s aid. I t provides a n a utomatic a nnual inflation increase. F or exa mple, a p olicy pa ying $5,000 a mo nth f or ca re a utomatically goes up 3 p ercent. “It automatically compounds for you,” Turner said. “If you buy a policy when you’re 60, for example, and don’t need ca re until you’re 85, t he $5,000 a mo nth y ou sti pulated in t he p olicy p robably w on’t b e eno ugh, Turner said. Long-term care insurance is not meant to ha ndle sho rt-term st ays, she s aid. “ It’s for someone with Alzheimer’s or a stroke, or someone too old to care for themselves on a daily basis,” she said. Prospective clients have to be in g ood health w hen t hey p urchase t he p olicy Turner s aid. “ Most co mpanies wi ll s end someone to your home to look at the last five years of your medical records and perform a short cognitive test,” she said. Why do people buy it? Asset protection is one reason, according to Turner. Other reasons are that people want to ensure that they have good quality care when they need i t, a nd t hey do n’t wa nt t o b urden their children or grandchildren. Who sho uld no t b uy lo ng-term ca re insurance? S omeone w ho has no ass ets and couldn’t afford the monthly premium isn’t a candidate for the insurance, Turner said. “Some people buy it to protect their assets,” she said.
She str ongly sug gests t hat p eople interested in lo ng-term ca re in surance g et quotes f rom tw o o r t hree different companies. “I’m no t tied t o a ny o ne co mpany, s o I can compare companies,” she s aid. “You want t o mak e sur e y ou b uy f rom a n A rated co mpany. Y ou wa nt t o w ork wi th someone w ho kno ws a nd under stands long-term care insurance.” She em phasizes t hat unlik e he alth insurance, lo ng-term ca re is o ne b uy. “ You don’t switch a y ear or two from now,” she said. “ You wa nt t o g et i t r ight t he first time.” But co mpanies issuin g t he lo ng-term insurance ca re r eserve t he r ight t o ra ise rates, a nd t hey will g o u p, acco rding t o Turner. Without lo ng-term ca re in surance, people pay for their care out of pocket until t heir ass ets a re do wn t o $3,000. Then they g o o n w elfare. “ Some p eople do n’t want to run out of money to take care of themselves,” T urner sa id. “ A th ree-year policy gives you another three years.” Tuner has taught a number of classes on long-term care insurance. The next class is scheduled for 6:30 p .m. Wednesday, Nov. 20, through Eagan Community Education Department. Call 651-423-7920 for information or to register. In addition to learning the terminology and information about assets, quality care, and ho w p lans differ f rom on e c ompany to another, and alternatives to LTC insurance, a t t he c lass Turner will co ver MN Partnership Pla n, sha red p lans a nd e ven plans that return your premiums if care is not needed.