Long-term care coverage easier to obtain before age 55

Mike Scott is an account executive with Barker Phillips Jackson, a 100 percent employee-owned independent insurance agency.

If you are between the ages of 18 and 64 or have someone in your family who is, you need to read this article. Long-term care insurance should be a prominent part of your financial planning process. It is not just for "old folks." Forty percent of the people who receive long-term care are between the ages of 18 and 64. The national average annual cost of long-term care is $56,000.

You may have an even greater need if you are a baby boomer.

Most likely you have aging parents and young children at home. That puts you in the middle, or a member of the sandwich generation. How can you balance caring for your parents, whom you feel obligated to assist because they raised you, and retain the role of provider for your own family?

Also, what about your own children? Do you want them to bear the burden of your care?

Long-term care insurance is one way you can ease the burden of the financial risks. The time factor must still be dealt with, but it will be an enormous relief to know you can at least shift some of the financial burden to an insurance company.

For those of us between 18 and 64, the primary reasons for long-term care are to cover costs of disabling injuries and illnesses such as arthritis, heart attacks, stroke, trauma and mental impairment. All of these usually require some type of ongoing care that is not short term. And once one of these occurs, it will be very difficult to secure the coverage on an individual basis, although you may be eligible for group coverage.

Many people believe that government programs will pay for their long-term care, however, 80 percent of all long-term care is now provided outside a nursing home in places such as rehab centers and private homes.

In Missouri, as in other states, you must spend down your assets to poverty levels to qualify.

Being impoverished is certainly not the reason you work to build a retirement plan, or the way you planned to spend your golden years. More than likely, you have other plans for those dollars for which you worked so hard.

Many people make assumptions that you should not buy long-term care insurance until your late 50s, as you should not spend your money on premiums until then. Not only are you gambling on the fact you will have no need until then, but long-term care insurance will be more expensive at age 55 than at age 40, and you may develop a health condition that will prohibit the acceptance for the policy.

Let's face it we are by most standards an unhealthy population as a whole. Our timesaving lifestyle lends itself to drive-throughs and microwave meals, which are rarely considered healthy.

As you are setting up your retirement plan, do not forget to assess your long-term care needs.

If your career is going well, your income is sufficient to meet your needs and your retirement savings goals are being met, everything seems fine. Then the unexpected happens a car accident, a stroke, or a disabling disease.

Now what will you do? How will it affect your retirement plans? If you are unable to work for six months or more, how will that affect your goals? How will you pay for the care that will be required? Who will provide for your family?

Long-term care insurance is part of that solution.

There are several options for purchasing long-term care insurance, whether you do so individually or as part of a group benefit plan.

There are some tax advantages for individuals, small-business owners and the self-employed.

For groups of 15 or more employees, you will find long-term care insurance to have average premiums of less than $10 per month per person.

Most importantly, find a qualified independent agent to help you assess the plans and your own needs. Some plans have exclusions and limits that will be important based on your needs.

You will also want to determine whether you need a reimbursement-based policy or an indemnity policy. Reimbursement policies will only reimburse you for the actual amount of the care you receive up to the policy limits. Indemnity policies will provide the dollars based on the policy limits, regardless of the actual costs.

When finding solutions for your long-term financial plan or when reviewing that plan, remember to consider long-term care insurance. It is not just for those over 65. It is for you, your parents and even your own children.