20 July 2008

Long Term Care Insurance & ADLs

ADLs: Activities of Daily Living, from buttoning your own clothes to feeding yourself. Simple concept but revolutionary when you get around to assessing a person's ability to live unassisted. Either you can do them or you can't. When you can't, you need long term care, which may or may not involve medical care.

Costs of long term care:
Highest = nursing home
Next = assisted living facility
Lowest = own home

What's not so easy to predict is the actual dollar figures, and that's what drives sales of long term care insurance. Increasingly, baby boomers are buying that insurance, expecting to have to cover these costs that Medicare excludes. I haven't seen any statistics about who is purchasing, but I would predict two primary markets: those people whose employers have put the option before them in convenient fashion, and those boomers who are currently paying for their elderly parents' care in assisted living or nursing homes. (Too late to purchase insurance for their parents, the boomers are predicting their own future, perhaps based largely on the obvious evidence of longevity in the family.)

ADLs and IADLs: Just a shirt button doesn't hint at the daily activities that separate independence from dependence, of course. We'll adopt velcro and sashes and other work-arounds! But the full list of ADLs is meaningful: hygiene, nutrition, safety. Another list is called Instrumental Activities of Daily Living (IADLs) and details managing money, shopping, and so forth. The ADLs are explained in a web resource on Health Assessment published by the American Geriatrics Society.

Insurance options: Boomers are now examining long term care insurance plans as intently as they once researched life insurance. The choice between whole and term seems like child's play, now. The array of options for long term care involves levels of care, length of care, location of care. Add to that the pragmatic choices of when to purchase and when to delay, and when to stop paying premiums. Some of the questions about risk are addressed by the National Clearinghouse for Long-Term Care Information.

On a personal note: I do purchase long term care insurance. Every September, I write an annual premium check and I accept most of the upgrades as they are offered. This has meant an increase in premium from a little under $400/year to a little more than $400/year, over the past 7 years. I purchase the insurance because I fear I will live forever. Tom Bold, on the other hand, eschews the concept. I know this means that I am his long term care insurance. ~ Lida

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.


Anonymous said...

I found looking into long term care insurance to be a trial. There are so many options and the providers often have their own language. I found Insure Your Future online and called an agent who (very patiently!) took me methodically through the options and provided quotes from several companies. I ended up with a policy that pays monthly (not daily!) benefits that increase each year with inflation. Also, I got rid of the elimination period. Also very important, I actually understand what I have, which I never thought would happen.

Anonymous said...

It is important to find a Long-Term Care Specialist who has had additional education and training in long-term care financing and planning.
LongTermCareInsurancePros is a member of American Association for Long-Term Care (AALTCI), Long-Term Care and Corporation for Long-Term Care Certification (CLTC)and Long-Term Care Professional (LTCP) This type of coverage needs to be designed with your own specific needs in mind.
You can download a free Ebook from www.LongTermCareInsurancePros which will get you started sorting out what Long-Term care is and where it is provided.

Rita said...

Every boomer should go through the exercise of determining whether they should buy long-term care insurance. There are good booklets available where you can go through steps to determine if buying it is right for you. As a consumer journalist, I've written about the topic. I'll be writing about it on my blog, The Survive and Thrive Boomer Guide at http://boomersurvive-thriveguide.typepad.com.