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Long-term care insurance: Do you need it?
Care, costs can range from $1,000 to $9,000 per month, surveys show

by Gary Alt

What comes to mind when you hear the words "long-term care"? If you're like a lot of people, you immediately attach the word "insurance" to the end of the phrase.

But when it comes to long-term care, I'd like you to replace the word "insurance" with the word "planning" or "plan." Having a plan for long-term care is essential. Buying long-term care insurance is only one option, an option that's appropriate for a small percentage of people.

But first things first: What is long-term care? It's defined as "needing assistance for a period of 100 days or longer." It can be caused by an accident or sickness but more often it's caused by memory issues or simply living a long life. Medical science has increased our longevity but not necessarily our ability to remain independent. In fact, long-term care is mainly a women's issue because women tend to live longer than men.

Long-term care services can be provided in your home, in an assisted living facility or in a nursing home. Depending on the severity of the need for care, costs can range from $1,000 to $9,000 per month or higher in the San Francisco Bay Area, especially for Alzheimer's care.

This type of care is not paid for by Medicare or Medicare supplement insurance. It's paid for with one of four resources: 1) your assets, 2) Long-term care insurance, 3) your family, or 4) a welfare program. The heart of an effective plan for long-term care is to deliberately select one of those options before you need care.

Make sure you talk to your family as you consider these options. While you may be reluctant to discuss your personal financial situation with your adult children, this is something you'll want to be on the same page with them on because it will affect your standard of living and comfort later on.

What are your odds of needing long-term care? In the general population, the odds are about one in five. But your individual odds could be higher or lower. An analysis of your genetic history, your lifestyle and your current health can help you get a better snapshot of your odds. Analyzing this information can go a long way toward helping you choose your best option for planning ahead.

If you want a comprehensive education about how to plan for long-term care, I recommend the book "How to Plan for Long-Term Care" by Allen Hamm. Allen is a nationally recognized expert on this topic who happens to reside right here in Pleasanton. He's provided me with some complimentary copies of the book to provide to readers of the Pleasanton Weekly. Contact me if you'd like a free copy. (Disclosure: Monterey Private Wealth does not sell insurance.)

--Gary Alt, AIF(r), CFP(r), is co-founder of Monterey Private Wealth in Pleasanton. Send your financial questions to gary@montereypw.com.