Redmond, Streed & Yokom Law Office Blog

This is a question that is being asked by many individuals again and again, primarily based on the cost of long term care insurance.  Unfortunately, the cost of nursing home care continues to increase at a much faster pace than the return on most of our investments.  Like any insurance, we buy it for peace of mind.  When we are younger, we buy life insurance to replace a lost income in the event of death or to pay for funeral/burial expenses.  We buy insurance on our homes and cars in the event of a fire or an accident.  Long term care insurance is no different.  We buy it for the peace of mind that the assets that we have worked our entire life to save will be protected in the event a spouse has to enter a nursing home.  Although, most of us save money during our entire career to support us later in life, most of us are not prepared to spend several thousand dollars a year on long term care.  Less than 10% of seniors typically have long term care insurance, yet 90% worry about long term care costs.  It may seem expensive, as much as $3,000 or $4,000 a year, but in the grand scheme of things a $3,000 a year premium could ultimately protect over $70,000 of your assets each year that you are in the nursing home.

Many of the clients we talk to think that Medicaid is an easy solution for their long term care costs.  Unfortunately, if the client has retirement accounts or other investments, the government is going to take these into consideration before Medicaid is awarded.  Just remember that interest rates have fallen, longevity has improved and care costs have increased faster than general inflation and for these reasons alone, long term care insurance is something you should consider.