LONG TERM CARE By John R. Bullis
The cost of nursing home as of May 2013 is about $7,139 per month in Nevada.
The cost of nursing services in the home by qualified caregivers can be that much or even more for 24 hour care.
Hopefully we won’t need that care or not for very long. However, it seems the average need is about three years of care.
If a veteran has low income and less than $80,000 in assets, war veterans may be eligible for up to $2,000 per month for home health care, a nursing home or assisted living. A look at www.veteranaid.org will give some information about that program.
If you have a “whole-life” life insurance policy, the cash value might be a help in paying for the care. If the withdrawals are more than the total premiums paid, the excess is probably taxable as ordinary income, but the premiums paid amount is likely to be tax free.
Some folks have sold their “whole-life” life insurance policies. The amount they receive depends on several factors, their age, their health, the size of the policy and who they sell it to. Life settlement buyers always pay less than the face amount of the policy-the death benefit.
If someone is “terminal” (expected to die in one year), perhaps the policy will allow payments now of part of the death benefit. Those payments are usually treated as life insurance benefits, tax free.
Your savings can be used up fairly quickly if you pay “out of pocket” for the care. That’s partly why you saved it, but the high monthly cost of long term care will reduce the savings that you might leave to your heirs.
Some folks buy a life insurance policy with a long term care insurance rider. It builds a cash value, pays for long term care (if needed) and has a death benefit as well.
Others buy a long term care insurance policy covering home care and/or nursing home. If a couple buys those policies, the unused portion for one spouse may transfer to the surviving spouse.
The welfare known as Medicaid is available to a single individual with income of $2,130 per month and only $2,000 in the bank. They can have as “exempt” assets a primary home with less than $550,000 equity, a car and a couple of other small items. The problem with Medicaid is the rules to qualify and the sharing of a room with other patients that may prevent you from sleeping, etc. See an elder law attorney before you think of maybe going the Medicaid route.
Did you hear “Chance comes to those who know what they want” African Proverb