It’s better for parents and their children to discuss how to financially plan for later years than to wait until financial and health issues arise. These discussions can be emotionally difficult but it is important that children and parents agree how critical matters such as housing, caregiving, estate planning, and inheritances are to be decided.
Family discussions between parents and children can often be eye opening and serve as a reality check to both the parent and children.
Should the discussions take place now or later? Ideally, it’s best to have the conversations before any issues arise. Try not to delay and to have these conversations sooner than later.
Areas of discussion should include…
Long-term care and housing alternatives. Surveys indicate a small percentage of parents and children have had this conversation. In addition, there is much misconception between parents and children of what the alternatives are and what makes the most sense.
Wills and estate planning. A proper will and estate plan will often help to avoid the unexpected.
Income and expenses at retirement. Parents and children often do not correctly understand what their income and expenses will be at retirement.
Guide to important documents, assets, and debts. It’s important for loved ones to know where wills, trusts, and health directives can be found: and, a complete listing of all assets owned and debts owed should be maintained.
Before buying a long-term care insurance policy ask the following.
- Not all policies are the same. Contact several insurance companies and compare the benefits. For instance what’s covered and what’s not covered, limitations of the coverage, and the premium cost.
- Carefully read the policy to make sure you know what you are purchasing and you’re clear as to what the policy covers and does not.
- Review the application for correctness. You don’t want to be denied coverage due to an incomplete or inaccurate application.
- Is the insurance company financially stable? Obtain its rating by the rating agencies.
- Obtain the company premium increase history and what the premium is today and for the future.
- Be careful of advertisements. Don’t be mislead.
Benefits of Home Care Agency VS Direct Hire
Know the benefits of both and make a better decision.
Home Care agency…
- Must conduct a criminal background of hires before they are placed in someone’s home.
- Must have insurance policies to protect their clients.
- Replacements are readily available to continue service without interruption.
- Home care agencies have the experience and knowledge to make sure their employees are qualified for the work that is required.
- The cost is often less.
- You take on the responsibility of being the employer including paying payroll taxes and workers compensation.
If the worker is hurt on the job you may be responsible both legally and financially.
Long-Term Care Insurance Cost?
Premiums can vary and are based on a number of factors. Major factors include your age and health at the time you purchase a policy and the type of coverage purchased. Policy cost is affected by the amount of daily benefit, length of the maximum benefit period, inflation benefits and nonforfeiture benefits.
Long-term care insurance can be expensive so know what your income can afford today and in the future, before you spend on a long-term care insurance policy. A general rule of thumb of affordability is the policy premium should not exceed 7% of your income. If it would be difficult to pay the premium today and you expect your income to not increase it is probably not a good idea to buy long-term care insurance.
Warning: The term “level premium” can be misleading. Most insurance companies will not guarantee that the premiums will never increase. Before buying, examine the information provided in the outline of coverage and face page of the policy.