Sorting through Long Term Care Planning Options

By LouAnn Schulfer, AWMA®, AIF® Accredited Wealth Management AdvisorSM, Accredited Investment Fiduciary® , Published Author |

Big decisions in life can be intimidating. Some people are great at planning, while others procrastinate. Sometimes we stall because we don’t know where to begin. Many people find this true in financial planning for long term care.

Write a list of what is important to you. The majority of us like to believe we’ll be among the minority and reach a ripe old age without ever needing care. So, start your list with two columns: title the left column “What if I never need care?”, on the right “What if I do need care?” If you are married or have a life partner, be sure to include them in the discussion as well as create a separate list with the same questions for them. Answer in every way possible, from the type of care you’d receive to how you’ll pay for it.

Big questions include: What is the cost? What am I willing to pay? Where will the money come from? Explore your payment options in both columns. If I never need care but paid for a policy, what happens to the money I’ve paid to the insurance company? If I do need care, what does the contract pay for, how much will it pay, and for how long? When does the policy pay?

A policy is a contract between you and an insurance company. If you hold up your end of the deal by paying your premiums on time, the insurance company is contractually obligated to hold up their end of the deal by paying for the services under the conditions specified in the policy. Some policies offer a death benefit payout for money that was not used for long term care. There is a “benefit pool”, a defined sum of money available to pay for long term care and whatever is not used will pay to your chosen beneficiary upon your passing. Policies may cover a single person or may be a joint policy covering two people, which can be a married couple, two people who are not married but live together and share bills, business partners, or any two people within 25 years of age who have an insurable interest together. Some contracts may only cover skilled nursing while others pay for the gamut from in-home care to assisted living to full skilled nursing. Home-maker services may even be included in the contract, covering things like meal preparation and housekeeping. The more restrictive policies will pay benefits only when care is needed for a diagnosed chronic illness with no prognosis for recovery, while other less-restrictive policies pay when there is loss of two of six activities of daily living. ADL’s are an industry standard, meaning they are the same from company to company. The six include eating, dressing, transferring, bathing, toileting and continence. Contracts may also pay when the insured has a cognitive impairment requiring supervision such as Alzheimer's, Dementia or Parkinson’s. For an extra cost, inflation riders can be added. If you are concerned about exhausting your assets if care is needed, look for a policy that offers lifetime coverage. “Guarantee” is one of my favorite words in an insurance contract: look for guaranteed premiums, meaning they can never go up and guaranteed non-cancellable, meaning the insurance company cannot refuse to renew your coverage under any circumstances. Buying a policy can be like buying a car: there are many options to consider, each with their costs and benefits.

If all of this information still seems a bit confusing, go back to your list. Organize your priorities and let that be your guide to sort through your options for long term care planning.

Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices.


LouAnn Schulfer of Schulfer & Associates, LLC Wealth Management can be reached at (715) 343-9600 or , or


This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.