John Bullis: Long-term-care insurance for parents
July 24, 2012
It is no surprise that the cost of long-term care, in the home or in a nursing facility, is expensive – with higher costs to come.
Some folks are too old or too ill to get long-term-care insurance. Some are not able to pay the premiums because of low income.
When the parent has valuable assets – for example, real estate – but not a lot of current income, maybe the children (or siblings) can make gifts by paying the premiums.
That could protect the real estate from being sold while prices are low. The gift tax rules allow for annual exclusion gifts that are not subject to gift tax.
First, it is wise to have a family meeting to get all of the details listed and see whether the parent is able to qualify for long-term-care insurance. Then, try to determine whether the purchase of a policy is a good idea.
If it seems likely that a policy could be a benefit to the family, get some quotes on coverage and premiums.
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The main benefit of long-term-care insurance is to protect those assets that have taken a lifetime to accumulate, and also to relieve the family from the burdens of providing care.
Those who plan ahead are trying to ensure their independence and retain as much control over their lives as possible.
High-quality care can be provided by using private funds (i.e., savings), or by receiving benefits from a long-term-care insurance policy.
One of the major benefits of this insurance is allowing the current living arrangements to be maintained and to minimize disruptions.
It has been estimated that about 77 percent would not want their children or spouse to care for them. About 91 percent don’t want children to sacrifice job advancement to pay for their care.
Talk with an experienced insurance agent to select the best carrier and to customize the coverage to meet your goals. There are many choices to consider, including the benefit amount, elimination period, inflation protection, maximum lifetime benefit, guaranteed insurability option, underwriting class, etc.
It’s sort of like going to a restaurant and looking at all the choices available.
It’s best to buy this insurance before a major health event. Early is better than later.
Did you hear? “Challenges are what makes life interesting; overcoming them is what makes life meaningful.”
• John Bullis is a certified public accountant, personal financial specialist and certified senior adviser serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.