Is it time to supplement long-term care insurance?

Dear Michael: We bought long-term care insurance back about 15 years ago. We bought $100 per day with three percent inflation. We can deduct these premiums from our income taxes. Our $100 is up over $200 per day.

How do you think we are sitting regarding long-term care coverage? Our coverage includes home care, assisted living, and all levels of facility care. We would still have our income in the event of one of us going into the home. Are we in good shape? – Long-Term Doubts.

Dear Long-Term Doubts: The statistics today show the average person's long-term care stay in North Dakota is now up to $93,020 per year per resident in North Dakota. Your long-term care, if you went in today, would pay about $73,000 – IF you meet all the terms and conditions for the insurance company to pay your care.

Most older policies, like yours, do not pay anything other than the billed cost of care and benefits are paid direct to the provider – not to you.

What happens if the provider of care is you? Or your adult children? Which one of your children do you expect to stop their life and take care of you?

Old long-term care insurance policies explicitly restrict paying a family member – even if they have the credentials.

Long-term care costs are accelerating much faster than three percent per year. The last few years it has averaged somewhere between six and nine percent inflation depending on location.

The percentage of people needing some type of long-term care has risen to over 70 percent in our state – if they are over the age of 65.

We now have over 6 million people in the United States suffering from Alzheimer's and that number will triple over the next 25 years. Why do they expect this number to triple? Because we all used to have the good graces to live until we got old (age 75) and then die. Now people over the age of 75 make up almost 20 percent of our population and the number grows every year.

If you were to design the perfect policy, it would pay you directly to you to use to stay in your own home, not become a burden to your spouse nor your children, and you can stay in your home for much longer. This coverage would extend the amount of time you could spend at home thereby shortening your lifetime stay in a facility. If it only took three days to three months in a facility before death, that is acceptable. But many are in there for many years.

The cost for coverage should be reasonable, and by reasonable this would mean around $5,000 per year (thereabouts) for annual premiums. If no lifetime benefits are paid out during your lifetime, then all premiums paid plus interest would go to your heirs. The premiums are guaranteed never to go up.

The benefits from this policy should go directly to you and you will decide how to spend the money on your idea of care. It should be a set amount each month and last between two years and four years – the average time a person falters before needing the type of long-term care insurance you have now.

You have the type of long-term care insurance that is the last resort policy.

I recommend a "first resort" policy that does all things you want it to do "before" you have to go to a nursing home.

The two work together great – hand in hand.