Long-term care insurance

When I meet with couples, I often ask about longevity. This question usually creates playful moments between spouses; jokes about marrying the pool boy or being worth more dead than alive are ways couples bring levity to an unpleasant thought.

While longevity may make for playful material, there are far-reaching implications, particularly as women outlive men in retirement. Either by divorce or death, many women end up alone. Regarding longevity, women have men beat.

Women often nurse a husband through his final hours only to have no one left to nurse them in their time of need. Some women need to prepare to fight this battle alone.

Women also can adapt to change in a medical setting. Women live longer than men once they arrive at the nursing home. The National Clearing House reports women live 3.7 years once in a Long Term Care (LTC) situation while men only live 2.2 years.

Many picture a nursing home when they hear of long-term care, but it comes in many forms. More often, people are receiving longterm care at home. Longterm care also entails respite care and hospice care.

Many people self-insure. Self-insurance can be risky as many long-term care situations cost hundreds of thousands of dollars. To properly self-insure, you may be required to spend huge sums without creating shortfalls in other areas of the budget. Most LTC situations are relatively short, but some can last a decade or longer; in such a case, you would need close to a million dollars.

Eventually, Medi-Cal would kick in, but Medi-Cal waits until you have depleted most of your assets.

Long-term care insurance is cost-prohibitive. In fact, paying for LTC insurance over many years may amount to prepaid care rather than actual insurance.

Long-term care premiums can be engineered to become more affordable. The insured can lower the level of monthly care, and you can draw out the elimination period. The elimination period is the number of days the insurance company requires the insured to pay before benefits start. Sixty, 90, and 120 days are all common elimination periods.

Life insurance companies have begun to make things easier. Some life insurance policies will have a rider allowing early access to the death benefit to pay for LTC expenses. This can be a saving grace and should be considered an option while shopping for LTC policies.

A growing number of insurance companies also allow annuities to be accessed for long-term care costs. Some companies will enable deposits in an annuity to serve as leverage, offering multiples of that amount for LTC.

Many women should spend extra time planning in this sector.

Most Americans will need some degree of LTC. Discussing LTC options with multiple generations may be a good idea, as it may affect children's and grandchildren's lives.

John Mills is a registered investment advisers and certified financial planner. Reach him at 707-254-0155 or MillsWealth.com. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.