When advising clients about how to plan for the possibility of needing long-term care, elder law attorneys generally put long-term care insurance (LTCI) at or near the top of the list of planning strategies, provided the clients can afford the coverage and are insurable. But are elder law attorneys walking the walk for themselves and their families as well as talking the talk to their clients?
For the most part, yes, according to a recent ElderLawAnswers survey. In the survey, 58 percent of responding elder law attorneys said they have LTCI. Another 10 percent said they are planning on buying it but haven't gotten around to it yet and about 8 percent lack coverage because they are uninsurable.
Of those who don't have LTCI, the primary reason is that it's considered too expensive. The other reasons respondents gave, in descending order, were that they're too young to think about buying it, they are uninsurable, they plan to self-insure, they don't trust the insurance companies, and they are concerned about rising premiums. One attorney out of the 87 respondents intends to spend down his or her resources to qualify for Medicaid coverage of long-term care.
A number of responding attorneys also added comments about their reasons for purchasing LTCI and their experiences with it. Following is a sampling of the comments:
- As elder law practitioners, how can we really not have [LTCI]?
- As a baby boomer, I am concerned about access to quality care due to the number of folks my age. [LTCI] puts my spouse and me at the top of the list, because we have a method of payment. Also, in a second marriage, all of the stepkids get along knowing assets are preserved and they won't have to be our caregivers.
- My mother, age 86, is presently using her [LTCI] and it is a saving grace for her and for her children. She started using the policy for hours of care at her home, then for assisted living. We have had an excellent experience with MetLife. The inflation rider and the disability waiver of premium rider resulted in a significant sum available.
- Even though I (now 60) got my [LTCI] when I was 50, I am not sure that I will be able to pay premiums until I need the care. The premiums went up 35% in two years with my company (Unum). I now pay about $2,700 per year (lump sum). Rising premiums and not enough income will probably force me to give it up when I retire. The U.S. needs a viable public LTC program, not the rip-off plans provided by private insurance.
- I've had [LTCI] since age 51. I got it through AARP and it is very affordable, although it has increased due to cost-of-living increases in benefits.
- I purchased a 10-pay policy* so that I could pay the premium while at top earnings and maximize the tax deduction.
- Although my wife and I have three-year policies, I am considering some way to get more coverage for my wife since she is four years younger and either home care or assisted living is now more than three years in many cases.
- I didn't get it until about age 55, and then a few years later we switched to "10-pay" so my premiums would be paid up before I retired. It is costly -- $6,000-$7,000 per year for my spouse and me -- but I've got to walk the walk if I'm going to talk the talk.
- The insurance may be expensive for us to carry in retirement but I have family members with Parkinson's disease and with Alzheimer's disease and I believe that purchasing the policy was a wise decision.
- At age 55 I was worried about ever-increasing premiums in later years. I chose a 10-payment option; the premiums are big chunk at the moment and I cannot fully deduct them for income tax purposes, but hopefully the risk will be fully paid and addressed during my working years.
- I am so glad I have it because I saw family members who had catastrophic medical expenses simply eat away substantial savings and investments in 2-3 years. I currently have a parent who is 86 who purchased [LTCI] at age 70. It was very expensive. However, he now has Alzheimer's, Parkinson's and is legally blind and the [LTCI] is supplementing the cost of his home health care.
*One of the drawbacks of long-term care insurance is that companies are usually unwilling to guarantee that the premiums will not rise over time. One solution is an option offered by some companies known as "10-pay" policies. These policies require only 10 annual premium payments and then the policies are paid up for life. Of course, the premiums are higher over those 10 years, but when done the policyholder's long-term care funding is complete.
For more on long-term care insurance, click here.