Here’s a tale from the retirement belt about long-term care (LTC) insurance and how it may not be all it’s cracked up to be.

Bob’s mother passed away recently at the age of 92. And, like most of us, she wanted to live out her life at home, not in a facility. This is despite the fact that she needed assistance with just about everything… but not enough assistance to satisfy her long-term care provider.

She had an expensive LTC plan that should have provided in-home and facility care. But the insurer informed Bob that unless she was incapable of performing three of the five “activities of daily living” – maintaining personal hygiene, eating, dressing, maintaining continence and transferring (getting in and out of bed or a chair without help) – her policy would not pay for the assistance her family felt she needed during the last two years of her life.

According to my friend, the insurer did not consider needing help with dressing, bathing, walking, eating or toileting the same as “incapable of performing.”

Bob’s mother spent nearly $60,000 per year for aides to help her in her daily activities who made it possible for her to stay in her home. But not one cent was covered by her LTC policy, even though it provided for in-home care.

According to Bob, they finally demonstrated her inability to perform three of the five daily activities just one week before her death.

And Bob’s mother was one of the lucky ones. She could afford to pay for the help she needed.

Only 11% of boomers have LTC insurance. Most do not because of the cost – it can be prohibitive.

But even when you do have the insurance and need help, it doesn’t necessarily cover you. Something is not right. It feels all wrong.

We’re living so much longer than our parents, so LTC insurance is a virtual must for our generation. And it ain’t cheap!

Make sure you know what triggers your benefits.

Good investing,

Steve

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