How Long-Term Care Insurance Helped My Mom

Long-Term care Insurance has been on my mind a lot lately. It’s been a financial life saver for my mother so I want to share a bit of her story with you in the hope that it will help you. I am sure some of you Baby Boomers will relate.

It all started more than four years ago. My Mom started falling on an almost a weekly basis. I could count on a phone call from the Kaiser emergency room on Saturday afternoons. She always thought there was something she could do differently to prevent falling. After years of balance classes at the YMCA it was hard for her to accept that her balance was so bad. She still has difficulty accepting it. After multiple falls, and injuries, she reluctantly agreed to have a care giver in her home. Despite excellent care, the falls continued. As a result, we had to move mom to a residential care facility for her safety, as well as to take care of her basic needs (referred to by Long-term care carriers as activities of daily living or ADLs) including bathing, dressing and managing her medication. After living a very active life filled with family, friends, travel, and hobbies, she could no longer care for herself. Being fiercely independent, she balked every step of the way, preferring to take care of herself. Sadly, she can no longer do even the most basic ADLs. After a year at a residential care facility she was diagnosed with early stage dementia. We sadly had to move mom to a memory care unit at another facility as the one she was at didn’t have memory care. By the way, Mom just turned 93.

So what is the cost of care and what does the insurance cover? Mom’s monthly cost of care is over $6,500 and this is on the lower end of the scale. The good news is that her policy pays for most of her care. So far her policy has reimbursed her over $100,000. By the time her benefits are fully drawn she will have received approximately $164, 000 compared to a total premium outlay over the 16 years she owned the policy of less than 31% of that amount. After complaining for years about the premiums, and threatening to cancel her policy, she’s now very happy she kept it. The younger you are when you buy it the lower the premiums will be.

I purchased my long-term care policy from my employer several years before opening my own firm. I told him the story of how my aunt was crippled by debilitating osteoporosis. She needed constant around the clock care. She eventually ran out of money and quickly passed away. My compassionate employer decided to offer long-term care insurance to the company. I am very grateful he did.

You’ve read all the studies or have already seen the stats. There is a growing recognition of the need to prepare Baby Boomers for healthcare costs in retirement, and many employees are turning to their employers for help. By understanding the issues and the evolving nature of the industry, and based on my own personal experience, I believe it is a very desirable option for employers to offer and one that will resonate as a true benefit for employees.