Long-term care and you

By Finbar Garcia

LUTCF, FSS, MFA

What is long-term care? Have you considered the possibility of needing this service as you get older?

Well, to start with, there are no insurance products that cover this type of service or benefits here in Trinidad and Tobago, this being due mainly to the fact that it’s expensive to both the insurers and policy holders.

So, where does this leave you financially if you need it in your golden years? Let’s look at some of the services and benefits of long-term care and how to fund it….just in case you need it.

Long-term care involves a variety of services to meet a person’s health or personal care needs during a short or long period of time. These services help persons live independently and safely as possible when they can no longer perform everyday activities on their own.

Most long-term care is provided at home by unpaid family members and can be at times a daunting task if the family members are not mentally or physically prepared. This could lead to decisions being made to place the elderly in a caregivers home.

The most common type of long-term care is Personal Care, help with everyday activities, also called “activities of daily living”. These include bathing, dressing, grooming, using the toilet, eating, and moving around, like getting out of bed or into a chair.

The need for long-term care can arise suddenly, such as after a heart attack or stroke. This often develops gradually as persons get older and frailer or as an illness or disability gets worse.

It is difficult to predict how much or what type of care a person might need, as there are several risk factors that increase over time, these are:

Age: The risk generally increases as you get older

Gender: Women are at a higher risk than men because they often live longer

Marital Status: Single persons are more likely to need care from a paid provider than married persons, as one spouse will take care of the other

Lifestyle: Poor diet and exercise habits will increase the risk

Family History: These are also risk factors to consider when planning, as there may be hereditary issues

Funding long-term care and receiving the benefits you want does not come cheap.

There are a variety of benefits that you can plan for, like Home Health Care: This is where you receive medical attention at home by a physician and prescription drugs delivered to your home.

Meals and household chores: These can be prepared and delivered to you at home, also having someone come in weekly to clean or run errands for you.

Friendly visits: This is having someone visit for short periods to chat and keep companion with you.

Transportation services: While it may not be in demand, it’s a service and benefit that can be provided if needed, as some persons may want to visit the shopping malls to keep active.

Planning for long-term care gives you the time to learn about services in your community and what they cost. It also allows you to make important decisions while you are still able.

Begin by thinking about what would happen if you became seriously ill or disabled. Talk with your family, close friends and even a lawyer as to who should provide care if you needed help.

Funding this is not an easy task, as you will need to consider all sources of income to start the process. Because there is no insurance to cover these benefits, you can do the following:

• Set aside a percentage of your income into a special Health Savings Account, designed strictly for long-term care needs. If you don’t use it, you would have saved a considerable amount of cash
• You can also pump extra monies into your retirement account to boost your retirement income. Remember, pensions are payable for life….as long as you live, so itis a great way to save
• Reverse Mortgage – this can be an option if you own your home and don’t have any one to inherit it, but you will need to understand the terms and conditions offered by the bank
• Downsizing your home – you may want to consider a smaller one or a townhouse, where by, the sale of your primary residence can be used to fund the new home and bank the difference for long-term care
• Rental income – based on the size of your primary residence, you may also want to consider having part of your house converted into a rental unit. This will generate some revenue to bank for long-term care if needed
• Disposing of some other assets to accumulate the future cash needed. These can be investments in the stock market. As you get older, the need for these and the risk attached may not be best for you, but it’s an option to sell
• Life insurance policies with a Cash Surrender Value – these policies, while they may carry maturity options, the cash values accumulated over the years can be used to fund long-term care cost. You may even consider assignment of the death benefit to cover some of the cost. Of course, this must be agreed upon in advance.

Using my experience as a guide, having caregivers at your home, there will be need for some logistical issues to be dealt with. For example, would you need one person for nights only or two persons, one for the day and one for the night shift, and hoping that no one calls in sick?

The average cost per caregiver is approximately $4,000 per month, dependant on their qualifications. Then you will have other personal, food and medical expenses to take care of.

Comparing this to being placed in an elderly home, this cost can start at $8,000 per month, shared room. Again, you will have other costs attached. The main issue is getting a home that is right for you, not just being comfortable.

There is no place like home. So, start planning today for your golden years, just in case things change.

Call me for more information on planning your financial future. Send your questions to myfinancialadvisor2020@gmail.com or call 620-1185.