[Boomer]

To buy LTC insurance or not?

Like any other financial decision, the answer boils down to your own cost of sleep.

Take the risk?

For those who answer yes to that one, here ends the questioning process.

But if you are even considering buying LTC insurance, you need to understand exactly what you are buying and what it can do and why you are buying it.

Protecting assets for your spouse is a good reason for buying LTC. If a rep is interested only in the sale without establishing that there is a need for asset protection, tell said rep to hit the road. Not everybody needs asset protection.

If you decide to buy, make sure the company's underwriting is strong. Qualifying for coverage should be reasonably stringent. You want your company to be around to cover you should the need arise.

I walked away from a rep who was interested in presenting only one company. It was a good company, but he pushed it so hard that I figured it was paying a fatter commission. I wanted to know what else was available. He did not want to tell me. I said bye-bye. And found a rep that showed what other good companies offered in comparison.

Make sure Assisted Living and Home Care are covered. I believe that some policies also cover paying a family member to do the care, but I think the family member has to be qualified to do so. It may be worth checking into that for some families.

There are companies that now offer shared care policies which basically allow a couple to share the pot of money.

A 5% compound inflation benefit built in can be essential.

The term of the policy affects the cost dramatically. Herein lies another gamble. 3 years? Unlimited? You get to decide the term. I have seen what is called "Memory Care" go on for quite awhile. It can be very expensive.

Realize that the policy you buy may not cover the entire cost, even with the inflation benefit. $200-$250 a day is not uncommon around here in Ohio. This varies a lot depending on your area of the country.

Kids taking care of you? Talk about a gamble. I always say that one of the problems with getting old is that you have old kids. I have heard it suggested that the kids pitch in to cover the premiums for Mom and Dad. Maybe that could be the kids' cost of sleep.

There's a lot more to this. But now I have to go get some sleep. But please, if you are considering LTC insurance, learn everything you can about it. There is a lot of good information available. Heck, we are all too old to go around buying stuff we do not understand.

Boomer