My own assets will cover the cost. Aside from the fact that your savings have shrunk in the bear market, long-term care costs are soaring. And if you do need to use your policy, odds are you'll get a windfall.
A recent study by the American Association for Long Term Care Insurance shows that more than 180,000 people received claim benefits last year from their LTC insurance policies.
One woman purchased a policy at age 43, paying an $1,800 annual premium. Three years later, her claim began, and 12 years later, she has received $1.2 million in benefits. Another insurer reports its largest "open claim" is a man who purchased benefits through his employer at age 54. Two years later his claim began, and has continued for almost seven years, paying out $690,000.
As LTCI Association Executive Director Jesse Slome says: "Long-term care insurance is not the lottery . . . not something you really want to win -- but it sure can prove to be valuable protection."
Government will pay for it! Yes, government will pay for care for impoverished seniors -- after most of your other assets have been spent -- through state Medicaid programs in state-funded institutions. But even today, state-funded nursing homes are forced to cut back on quality of care because of lack of funding.
Having insurance means your policy will pay for your choice of home health care, assisted living or privately funded nursing homes.
Policy prices might rise. Yes, that's a concern. LTC policies have been sold on the promise that the earlier you buy, the less expensive the premium. The implication was that these premiums were fixed for life -- except that the fine print allowed insurers to raise premiums for everyone who purchased a certain policy, if the state insurance regulator deemed it necessary.
One way to guard against rising future prices is to buy only from the strongest companies, with the most experience in this area. They're most likely to set realistic prices. Another way to avoid premium increases is to purchase a 10-pay policy, in which you pay premiums for 10 years, rather than the life of the policy. It's an expensive option but one that limits your exposure to future premium increases.
The insurance company might fail. Obviously, that's a concern, given the recent headlines about AIG. While there's no federal guarantee fund for insurance companies, our government has clearly indicated its support for this large insurer. So sticking with the largest, best-rated companies for your LTC policy is a better bet than being uninsured.
You can find those ratings at the website of the American Association for Long Term Care Insurance -- www.aaltci.org/ratings. Or go to theStreet.com and click on Portfolio & Tools, then choose "Insurance Ratings" to enter the name of any insurer.
Some of the largest providers of LTC policies have the top ratings across all ratings services, including Northwestern Mutual, MetLife, John Hancock and Mutual of Omaha.
Well, you can keep objecting -- or you can start acting by calling to get a quote on what a policy would cost for your mom. And if you buy for both Mom and Dad, there is a significant discount for couples. The gift of long-term care insurance is a gift that shows you really care! And that's The Savage Truth.