By Sharon Caren / Pacifica Tribune Columnist //
As the clock struck midnight 2012, almost four million Baby Boomers will have turned 65. I wonder how many of these folks have invested in long -term care insurance policies? Personally, I haven’t yet!
Many senior citizens are struggling to pay up to $6,000 per month for Assisted Living or Home Health Care.
In addition, many have life insurance premiums costing an additional $5,000 to $6,000 annually. When faced with having to choose to pay one or the other, paying the cost of long-term care is not an option.
It has to be done. So many people let their valuable life insurance policies, sometimes worth in the hundreds of thousands of dollars, lapse and eventually receive nothing, or next to nothing. This is a problem throughout our nation.
In response, in November of 2010, the National Council of Insurance Legislators (NCOIL) unanimously passed the Life Insurance Consumer Disclosure Model Act Law. This law requires an insurance company to notify the consumer that their life insurance policy can now be converted into payments for long-term care.
This is the first time in U.S. history that a law has been passed to require insurance agents to explain the fact that life insurance policies may be converted into a vehicle to cover long-term care.
Now we have an alternative to:
1) Lapsing life insurance policies and getting nothing
2) Selling the family home to cover long-term care costs
3) Children paying the care costs for parents
4) Spending life savings to fund long-term care
To give a bit of background, this law passed in 2011 after Congressman Robert Damron, Democrat, KY, worked to move this forward for six years.
Congressman Damron, president of NCOIL, held a panel discussion to get the word out about this wonderful new consumer benefit at the Senior Market Advisor EXPO last Aug. 25 in Las Vegas. A local long-term care consultant of 30 years, David Kitaen CLTC, of Marin County, was asked to be on the panel as he was the first LTC Broker in the United States to actually facilitate the life insurance policy conversion for one of his clients, a senior, living in Napa.
Chris Orestis, a prominent figure in National long-term care legislation, and Jayne Sallerson, of Emeritus Senior Living, one of the largest long-term care providers in the United States, were also on the panel which discussed how this type of insurance conversion can help the growing group facing increasing costs for senior care and housing.
The important conditions to make the conversion are:
1) Must be 65 years or older
2) Must be receiving care at home or in a facility
3) Must have an “in force” life insurance policy, not lapsed
4) Anywhere in United States
When converted, the money is paid directly to the health care provider.