Last week, I discussed lifetime benefits.  Specifically, I shared how they could have made an impact in the case of my maternal grandparents who both required care for a combined 15 years.

Using today’s dollars and assuming an annual cost for each of them of $97,515 without inflation and the current average cost for assisted living in my home state of New Hampshire, their cumulative expenditure on care would be in excess of $1.4 million.

To determine what the cost of care today is in any state, go to the OneAmerica Financial Interactive Cost-of-Care Map.

I made the statement that the most efficient way to manage their situation by the leverage that insurance can provide.  Our discussion will look at Asset Care as that funding source.  If you need a refresher on Asset Care, you can check out the FWF from September 18. 

Since we are talking about my family, we will get even more personal – the examples will reflect how Beth & I might approach the funding situation.  Quickly, we are both 60 and in good health.  We are insurable and lifetime benefits are available to us.  This was determined by submitting a pre-underwriting inquiry to OneAmerica Financial underwriting.

So, Beth and I had a long discussion.  In a twist of irony, she is comfortable that any opportunity for her to require extended care / long-term care will be short in duration based upon what her family has experienced.  I, on the other hand, have shared with you my family’s experience and I am concerned about a long-haul situation (specifically a cognitive issue). 

We decide that we would compare the acquisition cost for leverage (aka premium). 

For comparison purposes, we looked at joint policies with $10,000 of monthly benefit and 5% compound inflation for the life of the policy.  The rationale for the 5% compound is that it is the best way to generate a significant pool of resources for LTC in 20 years.  Again – MY concern is a long duration care situation. 

As you are aware, only Asset Care from OneAmerica Financial offers unlimited benefits (Annuity Care also offers this opportunity but that is a discussion for a later time).  And, in the interest of possibly saving a little money, we were willing to consider an 8 year (96 month) joint benefit period. 

So, here is how they stacked up.

That’s right folks!

And, the comparison here is between two different carriers who offer joint policies …

The numbers above tell the tale of the LTC benefits tape.  In both instances, benefits are assume to commence on day 1, month 1 of year 21 then last for the whole month of the claim funding qualified LTC support & services.   Both assume the full monthly benefit is paid for those services.  Both also assume that annual inflation of 5% compound for the duration of the policy.

As you can see, after 96 months, “the other guys” benefits are exhausted. 

Bear in mind, this is simply showing you one person using benefits.  If both of us require care at the same time at maximum monthly benefit, what will that do to “the other guys”? 

You’ve got it, it will liquidate the policy benefits and we will need to self-fund.  With unlimited benefits, that is not the case.

Just a little something for you to think about.