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What You Should Know About Long Term Care Insurance

Per my previous posts on this subject, “Business Succession and Long Term Care,” and “Long Term Care and a Living Trust,” I hope you understand and agree that the financial independence component of business succession planning should address Long Term Care contingencies.

Long term care is not a simple matter even if you have the resources to provide for whatever level of care you desire. Due to the medical circumstances associated with the need for long term care you will need an objective advocate who you believe would have your best interest at heart who may not be your children because as your children may be preoccupied, from the dark side, or you may not have any children. 

As previously described, a Long Term Care trustee of a Living Revocable Trust can be an answer. As described previously this trust could assure both the quality of care you desire during your lifetime and the appropriate management and disposition of your assets after your death.

Another simple solution is Long Term Care Insurance. Those with substantial means could respond that they don’t like insurance and have sufficient personal resources to pay for their care. If you don’t want insurance because you are concerned someone will be making money off of your infirmity, recognize that policies have changed and there is a possibility that, like my Dad who collected insurance benefits for five years, you could save money with this type of insurance. Quality policies now pay benefits for in-home care, progressive care or nursing home care. Insurance commissioner response to public outcry has essentially eliminated the loop holes on qualifying for benefits. Furthermore, the pooling of risk concept of insurance validates that some pay more and some pay less for the peace of mind that all who are insured have this contingent risk covered.

However, irrespective of your resources or mindset regarding insurance, Long Term Care insurance should be considered for several other very important reasons.

  1. Long Term Care insurance permits you to consume or invest the resources that would otherwise need to be set aside in the trust described earlier. You can also be sure that heath care facilities know who is being funded through automated pay insurance and the attentiveness to personal needs reflects their appreciation for this form of business.
  2. Long Term Care insurance companies will provide counselors who will help you and your trustee/advocate assess the level and quality of care needed, help engage the care providers in an efficient manner and ultimately facilitate enrollment.  Insurance companies hire these counselors with the sole purpose to help you or your advocates address the ever changing complexities of the Long Term Care culture and fulfill your personal needs. They also stay prepared to assist as circumstances and/or care changes. Their role is not to cut cost because the level of benefits is stipulated in the policy.  I can assure you from personal experience that the clout of a Long Term Care representative of an insurance company quickly resolves issues at a health care facility that are cause headaches for individual patients. 
  3. Long Term Care insurance relieves your children of concerns that they may be spending their inheritance.  You may think this wouldn’t happen to you, but I have observed this with alarming frequency. This type of insurance will give you, your trustee or your children the peace of mind that your needs are funded and administered by an objective professional.

Addressing Long Term Care care is a fundamental component of financial independence relating to business succession planning.


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