Of all the things I talk about with my clients, one of the quickest ways to throw ice water on the conversation is to bring up Long Term Care Insurance.  Many people feel long term care insurance is too expensive and they think their kids will care for them in their old age.  Some people also confuse the disability insurance they have through work with long term care insurance. Lastly, many people mistakenly think Medicare will pay for their long-term care expenses, which it doesn’t.  

Speaking from experience, adult children taking care of their parents in their old age is difficult.  My grandma, who passed away a couple years ago, required significant care the last few years of her life.  My family tried to take care of her on their own at first but found many of the duties to be uncomfortable emotionally for the caregiver while at the same time, slowly stripped my grandma of her dignity.  As time went on we found having a paid aide allowed us to gather and enjoy each other as a family much more comfortably.  But the trade off was cost.  My grandma wanted to keep her independence as much as possible so, for the last few years of her life she was paying for an apartment in an assisted-living facility and paying for a nearly full-time aide from an outside agency to pick up where the facility care left off.  Although she had a government pension and Social Security, and some long term care insurance coverage, this level of care put substantial pressure on her nest egg and worry on her and the family.

Many years ago a wonderful lady was referred to me by one of my clients. A few years after I helped her with a new investment strategy and retirement plan she moved to be closer to her family and new grandson.  Shortly after her move she became very sick.  She spent the next 10 years in a long term care facility and died penniless.  When I first breached the subject of long-term care insurance with her years before, she had just laughed and said, “That’s for old people.”

So, who should have long-term care insurance?  In my opinion, anyone that wants to increase the choices they have available to them and their family should a long-term care need arise may want to research the long-term care insurance options available to them.

(Editor’s Note: Chad Winn is a financial advisor for Wells Fargo Advisors, LLC. He can be reached at chad.winn@wfadvisors.com.)

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