Guest Author, Eileen Tell

Response to To Protect and To Save SmartMoney Magazine, November 1999

The article entitled To Protect and To Save in SmartMoney magazine doesn't really give smart or accurate advice about the best ways to meet the unknown future need for long-term care which may befall any of us, or our parents. Basically, the article suggests that most seniors would be better off either self-insuring for the long-term care risk or using funds from a Reverse Annuity Mortgage (RAM). Both these methods, however, presume that the primary objective is to be able to pay for long-term care costs, even if it means liquidating your assets, including your home, in the process. The article ignores the overwhelming evidence that most people want to leave an estate, however modest, to their surviving spouse, children or other loved ones. The primary objection to relying on private long-term care insurance is the belief that the policies will not pay benefits when the time comes. Both these premises are flawed and outdated.

*Cost of Private LTC Insurance*
The article gives an example of a husband age 65 who purchases a long- term care policy paying $85/day without inflation protection, providing 4 years worth of benefits for an annual premium of $1,500. It goes on to illustrate how inadequate this coverage is for this hypothetical couple since the $85/day isn't adequate by the time the individual needs care and since they didn't buy a policy for the wife who is actually more likely to need care since women live longer. The fact that this hypothetical individual didn't purchase a plan that best meets his needs doesn't illustrate that long-term care insurance isn't valuable--it merely illustrates that this hypothetical individual didn't get good advice on how much and what type of coverage to consider.