* Less than 200K in Assets?

Do you need to buy long term care insurance if you have $200,000 or less in savings? Many financial planners say no, but that answer may be wrong for you. See why…

Many folks have the idea that they don’t need long term care insurance if they have less than $200K in savings. For instance, the article written at Mcall.com’s Spending Smart blog, financial planners have told folks that they can spend down $200K in a year or so if they need nursing long term care and that they can then get on medicaid.

Well, that’s probably true. However, there are many other reasons one may want to protect their savings of, say, $50,000 or more, as well as any retirement-type income you might be paid in the years ahead.

1) Asset protection for Spouse: If you are married, you will want your spouse to enjoy the same lifestyle to which he or she has grown accustomed. Once you go onto the public dole, your spouse will be subjected to your State’s laws concerning Medicaid and long term care. Your retirement income (401K, pension, investments) if in your name, could be taken to pay back the State. Other assets over a certain amount can be taken for the State’s use, as well. This can leave your spouse in a precarious and less than desirable financial situation.

2) Protect your Home: If you own a home, Medicaid will most likely attach it for future use. Most States allow a spouse to stay in a home until the he/she needs to go on Medicaid or dies, but once your spouse is not living in the home, it can revert to the State. Depending upon your State’s law, once you are on Medicaid, you cannot leave your home to anyone. Your children cannot inherit it and your spouse cannot sell it, if needed.

3) Shorter long term care: It’s rare, but what if you needed long term care for only a year or so? Say you had a stroke or accident and your spouse was not able to be your caregiver. You were recovering, but you still needed to be in a nursing home for awhile, and then an assisted living facility and finally you required some home care. You would spend most, if not all of your nest egg on care and Medicaid would not have stepped in to help with any expenses. By the time you recover, your financial situation would not be so rosy or secure, would it? How would you feel then?

These are just a few of the reasons why it is even MORE important for those of us who have less money to make sure we are insured. The very wealthy can afford to pay out of pocket for long periods of time without it affecting the quality of their care or their family’s financial security. The middle and upper middle class are the ones who definitely need to protect every penny. Insurance is just another way to save a bit of money for the wealthy.

It’s not smart to be “penny-wise” by not buying long term care insurance, when you have family to consider. Paying a few thousand a year is better than possibly putting out 3 or more thousand per month, isn’t it? Of course, LTCi insurance is only worth buying IF you can afford to keep paying the [tag[premiums[/tag].

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