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What's the deal with LTC?

Bruce Williams discusses long-term care insurance and tenants with rights of survivorship.
BY BRUCE WILLIAMS Published: December 8, 2010
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DEAR BRUCE: My husband and I are approaching retirement and have met with a variety of financial advisers, all of whom have encouraged us to buy long-term care (LTC) insurance. The usual cost quoted is in the $300 to $400 a month range. We are skeptical. We have both worked and will have pensions, Social Security and investments in 457 deferred compensation. It seems that long-term care is a fairly recent invention of the insurance industry we've only heard about in the past 10 years. What is your take on purchasing long-term care insurance? -- Vickie, via e-mail

DEAR VICKIE: It may be you have heard of long-term care insurance only in the last decade, but trust me, it has been around longer than that. The problem is long-term care for someone with no assets or someone who is wealthy doesn't make sense. It's the rest of us in the middle that have to sit up and take notice. Three to four hundred dollars a month sounds like it's for the both of you. The benefits, how long of a period or how much per month and what maladies are covered that can determine the premium. You mentioned you have considerable assets and that you have worked hard and so forth. The troublesome part is for many people that still won't provide anywhere from $50,000 or more a year for long-term care and can quickly exhaust the assets, putting the surviving spouse in some jeopardy. You should sit down and determine what your income will be jointly and then individually. This will be the case in almost every instance, if one person dies before the other. Many times pensions are reduced, Social Security will clearly be reduced, etc. It is not necessary to insure for the entire amount. If your assets will allow you, as an example, to comfortably spend $35,000 a year upon one person's death. Then, perhaps, a $30,000 a year policy would be sufficient. The troublesome part is, without insurance, unless you are very well fixed financially, the surviving spouse can be left impoverished.

DEAR BRUCE: Please explain to me consequences at death of having property deeded "tenants in common with right of survivorship.

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