Dear Michael:

We bought nursing home insurance when we were in our fifties. Now that we are in our sixties, we feel like we are caught between a rock and a hard place. My father-in-law is in a facility with Alzheimer’s and they just raised his rate to nine thousand dollars per month. We bought one hundred and fifty a day with a three percent inflation on it, but our coverage is still around two hundred and twenty dollars per day.

That’s only six thousand and some per month, so we’re underinsured already. What are the chances we’ll need care?

– What Are the Odds


Dear “What Are the Odds”:

I can give you exactly what the odds are based on a recent study by the U.S. Health and Human Services October 10th, 2017.

  • Seven in ten people, who reach age sixty-five will need long-term care at some point in their life.
  • The average couple will spend close to four hundred thousand dollars for health care expenses in retirement.
  • One in five people who live to age sixty-five will need long-term care support for longer than five years.
  • Three out of four people will receive their long-term care at home from a spouse or a child.
  • Nearly two-thirds of family caregivers are female.
  • The average caregiver is age forty-nine, spends twenty hours per week providing unpaid care, works full-time outside the home, and has been a caregiver for longer than four years.
  • Nationwide, professional home caregivers receive over fifty thousand dollars per year for their services.

There, now you know exactly the odds of needing care sometime in your life and where you’ll likely receive it.

In the policy that you purchased a decade ago, now worth about two hundred and twenty dollars per day, it has an exclusion in it for any payments to family members for caring for you. You are not allowed to pay any family members – who likely, based on the above statistics, will provide ninety percent of this home care when needed.

In fact, it won’t pay any home caregiver unless they are part of a professional care givers groups such as Helping Hands or Guardian Angels and the long-term care company receives a bill from such a business for services rendered. Even if your child is a registered RN or LPN, they would have to work for such a care company before they could get paid for helping you.

Knowing what you know now, you are probably realizing you may need care but it will be at home and it will be provided by a family member or spouse. And, now, you realize your policy has a provision that prohibits payments for these family members.

The good news is you can still bridge the gap between receiving care at home and receiving care in a facility. The new generation of hybrid life insurance policies provide payments directly to you to allow you to spend the amount as you wish. Typically, the benefits are two or four percent of the death benefit, whichever you choose.

If you had a one hundred and fifty-thousand-dollar policy, for example, you could take up to six thousand dollars per month until the dollar value was used up. You can take less than that, if you like.

Now you receive benefits paid directly to you so you can use the money to make life easier at home – such as putting in a sitting shower, or standing tub, or lifts to help get in and out of chairs, beds, etc. or up and down stairs. Or maybe you just want to pay someone to help you. With this type of coverage, you can and it’s much more economical than you might think.

Bridge your gap in long-term care coverage with a hybrid to get you through until you own long-term care policy can provide for you.