Sandwich Generation News Winter 2003 For people sandwiched between aging parents and growing children
	Provided by Lidke & Associates, Inc., 10 Inverness Dr E, Ste 110, Englewood, CO 80112-5611

Why the Sudden interest in Long Term Care (LTC) Insurance?

First of all, LTC insurance is not new. Many people now in their 70’s and 80’s purchased coverage twenty years ago – but they are quiet about it. Because it is now the “ baby boomers” turn to make plans for the future, LTC Insurance is in the news - because everything the “baby boomers” do has always been in the news! The high and rapidly rising cost of Long Term Care makes it one of the most ominous financial threats facing the next generation of seniors. If current trends continue, the annual cost of being in a nursing home will increase to $190,000 by 2030. The cost for a visit by a home care aide will rise from $77 per visit today to over $366. Since most people average three visits a week, the annual cost will rise from about $12,000 per year to about $57,000 per year by 2030.

To put this in perspective…

Today’s 55 year old would have to save $4,400 a year for the next 30 years (and earn 7% interest before taxes) in order to have $300,000 for LTC expenses beginning at age 85. This will potentially cover less than two years of LTC expenses. In contrast, a 2-year individual LTC Insurance policy (with a 5% compound inflation protection factor) would cost about $700 a year to have the same $300,000 value at age 85. A 4-year plan would cost about $1,400 per year. Similar coverage for a 45 year old, would be about $400 - $800 per year.

The nay sayers have tried to convince the public that instead of buying LTC Insurance they should simply “invest” the money themselves. However, it is easy to see the error of this philosophy. First of all, most of us – even though well intentioned - simply do not have the resources to save the additional $367 per month it would take to equal $4,400 per year to self-insure (based on the 55 year old example). Second with the recent collapse of the dot.coms and sluggish economy, many people have seen their retirement investments slashed and are looking for more dependable ways to use some of their pre-retirement dollars to plan for their future financial security. LTC insurance provides a reliable return for the money invested – and is designed to provide extensive protection against the devastation of costly Long Term Care expenses. Most of us can better afford to purchase insurance at $700 a year than to save the $4,400 per year as noted above – and have far better protection.

LTC Plan features include a waiver of premiums when care is received and many plans have an additional survivorship benefit for couples. This feature anticipates one of the spouses in the marriage will die before the other, and when that happens, the survivor’s LTC premium is waived for life, after having owned the policy for ten years or more. This aspect of LTC Insurance cannot be replicated by those who want to self-insure. The other variable is while you are saving to provide this “self-insurance” and waiting for the “retirement pot” to grow, what happens if you have a car accident or some other disabling event and you need LTC dollars immediately? With Long Term Care Insurance, you will have money available for Home Health Care, Adult Day Care, Assisted Living Facilities, or Nursing Home Care now or in the future.

Consider the logic of protecting yourself with the purchase of LTC Insurance now..…. while you are young and still healthy. Even if premiums increase after the 5-year rate guarantee, they always remain based on the age you were when you bought the coverage. The benefit value compounds by 5% every year. Your Discounted Employer-Sponsored LTC Plan is available to you, your spouse and your extended family.

Please Replace with: Contact Us at: insurance@lidke.com

Long Term Care Quote Request: http://www.lidke.com/forms/Surveyform.htm

Phone: 303-649-1922 OR 800-888-9084