Covering your costs if you hang around

The adage, “Women get sick, men die” (yes, it’s one of mine) is born out in the statistics for disability and life insurance claims, and it’s reflected in the premiums. Men pay less for disability and more for life insurance because they are more likely to die before becoming disabled.

But what if you beat the odds? What if you get to a ripe old age, and then must cope with what seems like the inevitable physical decline? Are you banking on your strung-out, over-stressed kids to step in and be your caregivers? If not, have you made provisions for what can be a big expense?

You probably haven’t even thought about it but you should. If you have no intention of relying on your family to foot the bill for your long-term care, you’d better have a whack of cash ready. Don’t have that kind of money? Then it’s time to look into long-term care insurance.

Not as common here as it is south of the border, long-term care insurance is designed to pay the expenses of having someone come into your home to help take care of you, or of moving into a care facility.  Having a policy is handy for not only protecting your nest egg, but also ensuring you don’t also blow through the money your mate will need to get to the end of this life in comfort.

Long-term insurance isn’t cheap, but the premiums are a fraction of what you’ll have lay out in cold hard cash. Based on 2008 prices (the most recent I have available), a long-term care facility will set you back anywhere from $19,000-$25,000 a year depending on your need for privacy. Here are some questions to answer as you work through the decision to buy or not to buy:

1. Will you be able to continue saving to meet your retirement goals if you also take on the long-term insurance premium? The earlier you buy your policy, the cheaper the premiums. Wait until just before retirement and the cost might be prohibitive.

2. Will your children (or other family members) be close enough and have the time and money to see to your needs? I have no intention of asking my kids to add one more plate to their already piled-high stack. It’s my job to take care of myself. How do you feel about it?

3. Will you have enough in your retirement pool to not only take care of your ongoing needs, but also cover your long-term care needs? Lots of money in a big, fat savings account means you’re covered and don’t need more insurance.

4. Are you likely to live a long time and need long-term care support? You’ll have to look to your family’s history and their genetics for the answer to this question.