Military Officer - March 2008 - (Page 46) financialforum Part 2: LTC Options There are many long term care (LTC) options available, but how do you know which is best for your situation? Phil Dyer, CFP, discusses the ins and outs of various possibilities. L MOAA Offers You an Insurance Option ■ To find out about the MOAA-endorsed long term care insurance plan, visit www.moaainsurance .com and scroll down to the Long Term Care Availability box. ast month, we discussed some of the myths associated with LTC costs. This month, we will explore some of the financial options and planning pitfalls associated with these solutions. Option 1: Move in with the kids. For many families, this is a workable solution. Key considerations include your health, the ability of your kids to meet the level of care you and your spouse require, and the functionality of their home if you have (or might acquire) limited mobility or special needs. In addition, caretakers report chronic medical conditions, such as high blood pressure, at twice the rate of the general population and suffer more instances of depression. The National Alliance for Caregiving (www.caregiving.org) can provide invaluable assistance if you choose this route. Option 2: Reverse mortgage. Many factors can make it difficult for people to stay in their own home. Enter the reverse mortgage, which turns home equity into a credit line, a series of equal monthly payments, a lump-sum payment, or a combination of all three — to be used at the homeowners’ discretion, provided they are age 62 or older. One of the misconceptions about reverse mortgages is you sign your house over to a bank and your kids get nothing. Not true. While a reverse mortgage does create a lien against the house, which must be paid off when the home is vacated or sold, any remaining equity still belongs to the family. AARP’s Web site has an excellent guide to reverse mortgages at www.aarp.org/money/revmort. Option 3: Long Term Care Insurance (LTCI). This can be an excellent way to preserve assets for future generations or improve the level of care you receive should you need assistance. Be aware that LTCI does have lots of moving parts, so do some research before committing. Key elements include: ■ daily benefit: typically ranges from about $100 a day to more than $300 a day; ■ waiting period: the duration of time between when you qualify to use the policy and when the benefits begin; ■ length of coverage: typically ranges from three years to lifetime care (although many policies contain a lifetime payout cap); ■ inflation protection: usually a choice of several different inflation options; and ■ home health care benefits. (Most policies being written today provide full coverage for in-home care, but some only provide a 50-percent to 75-percent benefit.) Consider purchasing your policy from a highly rated company with good payment history, such as Metlife, John Hancock, or Genworth Financial. Finally, don’t wait too long to buy LTCI, because once you develop a chronic problem that increases your chances of needing LTC, most companies won’t cover you. MO — Former Army Capt. Phil Dyer, CFP®, is deputy director, Benefits Information and Financial Education. To find a financial planner near you, contact Garrett Planning Network at (866) MOAA-GPN (662-2476) or www.moaa .org/garrett, or visit www.moaa.org/financial center for other resources. PHOTO: SEAN SHANAHAN 46 MILITARY OFFICER MARCH 2008 http://www.moaainsurance.com http://www.moaainsurance.com http://www.caregiving.org http://www.moaa.org/garrett http://www.moaa.org/garrett http://www.moaa.org/financialcenter http://www.aarp.org/money/revmort http://www.moaa.org/financialcenter
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