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Kim Butler

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX

I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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Should You Purchase Long-Term Care Insurance?

November has been designated Long-Term-Care Awareness Month.

| BY Donald Liebenson

November is Long-Term Care Awareness Month, an initiative of the industry trade group the American Association for Long-Term Care Insurance that focuses on creating heightened awareness and education to provide individuals with the information to help them determine whether they should purchase long term care insurance.

Health care costs rank with having adequate retirement savings as Affluent individuals’ most significant financial concerns according to a survey conducted by Spectrem’s Millionaire Corner earlier this year. Not surprisingly, concern about health care costs increased with age and wealth level.

A family health catastrophe and spending their final years in a care facility are a personal concern for at least 50 percent of Millionaires, according to another Spectrem’s Millionaire Corner wealth level study.

Long-term care refers to a range of services and personal care support. Most is not related to medical care, but rather assistance with everyday personal tasks such as bathing, dressing, using the bathroom, eating, and mobility (transferring to or from a bed or chair). Other services include housework, money management, medication, shopping, pet care, and responding to emergency alerts.

Most contemporary long-term care policies are comprehensive and typically allow the policyholder to receive support and services in a variety of settings, including their home, hospice, nursing home and an assisted living facility. Comprehensive services generally cover skilled nursing care, therapy ranging from physical to speech, and help with personal care, the AALTCI states.

A 2013 AARP study determined that health care costs, including costs for long-term services and supports, are “a growing burden” for middle-class families across all age groups. Among the key findings was that health care spending has been growing faster than inflation and the overall economy. “Wages have not kept up with increases in health care costs,” the report stated, “and more middle-class families are struggling to cope with higher health insurance premiums and higher out-of-pocket expenses when they have an illness.”

Those who purchase long-term care insurance will find higher prices due to “increasing care costs and significantly lower interest rates that factor heavily into policy prices,” according to the 2013 National Long-Term Care Insurance Price Index released earlier this year by the AALTCI. Today, a three-percent yearly increase in benefits is considered the best option for those willing to pay the higher cost, the AALTCI recommended. A couple both age 60 will pay $4,725 yearly for coverage that grows to $349,000 for each when they reach 85. Comparable coverage cost $3,381 in 2012, according to last year’s price index.

Experts offering varying responses on whether individuals should purchase long-term life insurance. Because people are living longer, some consider it an essential piece of the retirement planning puzzle. Others believe it is a question more relevant to middle class individuals who do not qualify for Medicaid or are not wealthy enough to self-insure.

Just over one-fourth (27 percent) of Millionaires have received advice from their financial advisor about the decision to purchase long-term care insurance, a new Spectrem’s Millionaire Corner study finds. Twenty-three percent said they will seek this advice in the future. Just over one-third (34 percent) said they do not need this type of advice. Millennials and Gen Xers were most likely to resolve that they will seek advice about long-term care insurance (33 percent).

About the Author

Donald Liebenson

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.