Thank heavens for my father’s frugality with my family's finances. Dad, being the ever-vigilant member of the generation who lived through the Depression and who still clips coupons and buys in bulk, made the decision to purchase long-term care insurance for my mother. Without that additional help, we might be in very similar position to the people interviewed for the New York Times recent article, “Elder-Care Costs Deplete Savings of a Generation.”
He decided to purchase the long-term care policy because, as he said, “I figured I’d rather be safe than sorry.” His decision was influence by how long Mom's parents had lives: Mom’s father lived to be 87, and her mother lived to be 97.
Dad took the policy out in 1995 and didn’t take a large per diem because he didn’t know what the expenses would be when they both retired. Dad also didn’t factor the possibility of Alzheimer’s disease striking Mom when she was in her early 80's. In comparing notes, Dad and I realized that Mom’s mother lived with dementia for approximately 15 years.
“I rue the day that I didn’t take the inflation coverage out,” Dad said, adding that that’s water under the bridge now. He said that the long-term care policy he took out was for $30,000, and the premium is about $250 a month. Mom’s nursing home costs about approximately $44,000 annually. Thanks to the policy, Dad only has to pay about $14,000 a year for Mom’s care.
Fortunately, Mom doesn’t need much at this point, so there are no longer a lot of out-of-pocket expenses. However, the cost of aging was never a topic of discussion in our family – and we didn’t know how to anticipate the budgetary implications of aging and ill health. Just the basic things – healthy meals, clothing that can be easily accessed, and an elderly-friendly home – quickly consume assets that previously might have gone for travel, entertainment, and the latest gadgets.
The lessons that I’m taking from this is that I need to start thinking about what resources Dad’s going to need when he faces his own health issues. I’m also thinking about what is going to be needed in my future in case Mom’s family’s genes win out in how my advanced years play out – and start planning now.
Published On: January 02, 2007