What Your Long-Term Care Insurance and Your Grandma's Best China Have in Common

Do you have a long-term care insurance policy? If you’re 65 or older and need help living independently, have you used that policy to pay for care?

You might be surprised to learn that many people buy long-term care policies, then wait too long to use them. They treat these policies like Grandma’s fine China, used only when they need to move to assisted living or another long-term care setting, or like Social Security, which pays more the longer you wait to start drawing benefits.

If you believe this about long-term care insurance, I have news for you. It doesn’t work that way.

Take the example of a woman I’ll call Violet, an 85-year-old living alone in her home. Violet has become more and more frail in the last few years, and she doesn’t have the strength to easily manage most of the activities of daily living. She has trouble getting in and out of the shower. She can’t cook for herself anymore. She can’t do her laundry. Despite her limitations, Violet wants to continue living at home.

Violet has a long-term care insurance policy that she’s been paying on for nearly 40 years. Violet knows this policy would pay for someone to come in and help her do all those things she’s having trouble doing for herself. But she won’t use her long-term care insurance. Violet is sitting on that policy because she is saving it up for the day she needs to move to assisted living.

One day Violet falls getting out of the shower and breaks her hip. What happens next? Violet ends up in a rehab center and then an assisted living facility. If Violet had used her long-term care insurance policy to bring in home care, she could have avoided that fall in the shower that started the chain of events that culminated in her being forced into assisted living. She could have used her long-term care insurance benefits for home care services that would have enabled her to achieve her goal of staying at home.

That’s not the only problem. Because Violet put off using her long-term care benefits to pay for home care, she arrives at the assisted living community in a more frail state, and she could die before her policy benefits run out.

Here’s another example. The wife—I’ll call her Jean—is very frail. Her husband, Jack, is a few years older than Jean. Jack is in good health, but he is wearing himself out trying to meet all of Jean’s care needs in their home, which like many, isn’t all that age friendly.

Jack knew the day would come when he couldn’t manage Jean’s care by himself, so they put down a deposit to move into an assisted living community, then kept delaying the move. When I asked them why they were delaying the transition, Jack looked at me. “We want to spend one more summer at home,” he told me. “Besides, Jean isn’t all that excited about moving to assisted living.”

During my work with this couple, I learned that they had an excellent long-term care insurance policy benefit, far richer than most. Their desire to postpone the move to assisted living was a concern.

"You're not going to get your money's worth out of this policy if you don't start using it,” I told Jack during one of my visits. “You have this incredibly rich benefit and you’re going to leave money on the table unless you start using it. If you want to stay at home, that’s fine, but use your long-term care insurance benefits to pay for home care.”

It took me nearly six months to convince them to start using their policy to bring caregivers into the home, but finally, they agreed. Now they’re wondering why they waited.

Long-term care insurance is about the long game. If you play too long a game, however, you’ll end up losing. No one has a crystal ball and there’s no way to tell what’s going to happen as you get older. One thing is certain, however. Waiting as long as possible to use your long-term care benefits can backfire in ways you may not expect.

Are you hoping to age in place for as long as possible? Is someone you love hoping to stay at home for as long as possible? Kimbrough Law can help. Just give us a call at 706.850.6910.