Home About Writers Categories Recent Issues Subscribe Contact File Transfer





Melissa Davis
Melissa Davis is a business writer for the largest newspaper in Oklahoma, the Daily Oklahoman, where she covers personal finance and local stocks. She has won awards for both business reporting and personal columns. In addition to working as a journalist, Davis also spent several years as a public relations specialist in the health care field. She holds bachelor's and master's degrees in mass communications and has more than 15 years of experience in the writing and editing fields. Melissa can be contacted via
Insurance
2001-07-01 12:19:00
A ‘risky fate’ awaits those without it
Answer:  Many Americans, unprotected by long-term care insurance, could be facing risky fates, financial specialists say. Those experts provide staggering statistics to support their claims:• Nearly half of all people 65 or older will eventually enter a nursing home.• An estimated seven in 10 people belonging to that same age group will require home care.• Of those who enter nursing homes, most will stay about 2 ½ years."Long-term care can wipe people out," said Randy Thurman of Retirement Investment Advisors. "I've seen people who don't have insurance really get hurt."Larry Awbrey of Financial Network in Oklahoma City, considers long-term care insurance an increasingly worthwhile investment."Modern medicine, combined with technology, is extending the average life expectancy. That's the good news," Awbrey said. "But what if something happens and you run out of money? That's the bad news. That's the thing that can torpedo all the financial planning we've done."With America's population rapidly aging - and more long-term illnesses inevitable - Awbrey no longer feels comfortable focusing only on the traditional components of financial planning. He still spends considerable time on his clients' investments, retirement strategies, estate plans and trusts. But he at least raises the issue of long-term care insurance - and the risks of not having it.  From there, he lets his clients decide what to do next."They usually ask themselves, 'Do we have enough money to pay for the care we might need for a long period of time? And if we do, do we want to use that money - and in effect disinherit our children and grandchildren?  Or do we want to pass the risk onto an insurance company for a reasonable premium?'" Awbrey said.“For the poor, long-term care insurance is not an affordable option.  For the extremely wealthy, insurance is often unnecessary,” Awbrey said.  “But for the vast population of middle-class Americans, long-term care insurance can be a critical investment,” he said.Those average Americans are typical clients of Christine Kreissler, a senior long-term care specialist for General Electric. A pioneer of long-term care coverage, G.E. has distinguished itself by never raising existing customers' rates in 27 years of business. With 650,000 policyholders, the company is also vastly larger than its competitors.Kreissler became a representative for G.E. three years ago, after researching long-term care policies for her parents. She discovered that her mother, who'd suffered a stroke, didn't qualify for coverage. But her father was eligible, so she arranged a policy for him. Then she bought policies for both herself and her husband and set out to spread the word.Often, Kreissler is greeted by people reluctant to discuss coverage for nursing home facilities they hope never to enter."Actually, most people end up buying this so that, hopefully, they won't have to go to a nursing home," Kreissler said. "They want to get good,quality care at home instead."In addition to nursing home stays, long-term care policies offer coverage for the following:• Home health care, including services like physical therapy and nursing.• Health care equipment for the home.• Temporary "respite" care, which provides relief for family members caring for policyholders.• Adult day care.• Assisted living care.• Hospice care.Policy prices vary widely, climbing with increased coverage and the age of the buyer. As with most insurance, the policies are cheapest for those who currently need them least.Financial planners often recommend that their clients consider long-term care insurance around the age of 55, when rates are still affordable. Waiting even a few years can result in dramatic price differences, Kreissler said.She offered the following figures, all based on the same plan with comprehensive coverage that includes discounts for good health and spousal enrollment:• At age 55, a client would pay $95 a month and spend a total of $28,000 for 25 years of coverage.• At 60, a client would pay $161 a month and spend a total of $38,000 for 20 years of coverage.• At 65, a client would pay $288 a month and spend a total of $51,800 for 15 years of coverage.By postponing coverage until normal retirement age, people face much higher costs for fewer years of coverage - "even under the best-case scenario," Kreissler said."If you're taking high blood pressure medicine, you might not get the preferred health discount," she said. "Suppose your spouse had a little stroke and no longer qualified, then you wouldn't get the spousal discount either.  These discounts, of 10 percent and 25 percent respectively, substantially lower the overall premium price,” she said. “By planning ahead - and securing manageable monthly payments - Americans can better protect their assets and manage their risks,” Kreissler said. “Most Americans already buy insurance to shield themselves against major risks like home damage, car wrecks and health problems, she said. “They should similarly prepare themselves for the risk of expensive long-term care,” she added. "Once you have reached the age of 65, you have a 43-percent chance of spending time in a nursing home," Kreissler said. “And because we're all living longer, that risk is climbing all the time."
 
The Q & A Times Journal accepts no responsibility for unsolicited manuscripts or photographs.Materials will not be returned unless accompanied by a stamped, self-addressed envelope. Thank you.
 
Wildcard SSL Certificates