I'm 60 years old, in good health, and am considering long term care
insurance through my stock broker. I own a three unit building in San
Francisco and can have rental income indefinitely. My broker says that
long-term health care insurance is about the only good way to preserve
the value of my estate If I wish to leave something to heirs. Also, it
allows me to determine "lifestyle" decisions more than if I were to
have to rely on Medi-Cal, where I'd have to reduce down to some
nominal value in my estate and then let the state take care of me. As
I understand it, insurance will allow me to stay in my home and give
me the stated benefit to hire people of my choice to take care of me
in event of some debility related to my age. My primary question is:
Is long-term care insurance right for me? Or should I forget about it
and save the premiums I might pay into such a plan and self-insure?

Hello Curtiss ~

Yours is a tough question ... and insurance seems at times to be so
unfair, as it only pays to have it if you NEED it. Otherwise, you
wonder why you're paying for something that isn't doing you any good.

By coincidence, I have been looking at AFLAC offerings to "supplement"
my other insurance this week, and the thought that I can pay "all that
money" and not derive benefit from it all just sticks in my craw.

Please note the Disclaimer below. This answer should in no way be
regarded as advice in place of professionals you rely on. A bit of
information may help you to work with them and make an "informed"
decision based on what is right for you.


================
Life Expectancy
================

You indicate you are 60 years old and in good health. Good for you!
While you're enjoying your good health, it makes it even harder to
envision needing any kind of long-term health care.

Recent figures from the National Center for Health Statistics say all
males at age 65 in the year 2000 have a life expectancy of another
16.3 years.
   - http://www.cdc.gov/nchs/fastats/lifexpec.htm

     Since you were 57 in 2000, add 8 years to that
     (or a life expectancy of 24.3);

     Since this is 2003, subtract 3 years, and your
     life expectancy is now - according to those
     stats - about 21.3 years.

I hope every one of them sees you as healthy as you are now!


Only you and your professional advisors know your particular financial
situation, but if you are offered a policy that locks in reasonable
rates for the next 20 or so years and which covers the eventuality of
care for a debilitating or catastrophic illness - then perhaps that is
the way to go.


=======================
Some Numbers Crunching
=======================

While you didn't mention the premium amount - let's assume for the
sake of comparison that the premiums are $100 per month or $1200 per
year.

Given a life expectancy of 21.3 years, $1200 x 21.3 = $25,560, which,
considering the cost of care for a debilitating or catastrophic
illness, doesn't seem like much to have paid at all.

Even at double that premium, at $52,000 during the lifetime - the
rates would seem more reasonable than what the actual care could cost
you in a year's time.


Self-insuring, on the other hand means you won't be paying any amount
for something you may never need - and relying that the income from
your holdings now will see you through in the event you *may* need it.

Again - it's a tough decision only you can make, with input from your
trusted financial advisors.


==================
Health Care Costs
==================

Despite all attempts to contain health care costs, they are going up
annually. If you think about the costs of such things as -

    * Accident/Disability
    * Cancer
    * Hospital Confinement
    * Hospital Intensive-Care
    * Long Term Disability Care

and other health care costs (which are guaranteed to depress anyone of
any age), the care can run into the hundreds of thousands of dollars.
Under those cirumstances, you would no doubt be happy you had that
policy.

If the costs of health care, provided by the providers of your choice
are affordable now without having to rely on insurance, then it may
not behoove you to purchase an insurance policy.

AFLAC has some information on today's health care costs here -
   - http://www.aflac.com/product_info/why_insurance.asp

More figures from an October 2002 report from the Agency for
Healthcare Research and Quality on all hospital patients in the United
States can be found here -
   - http://www.ahcpr.gov/research/oct02/1002RA28.htm


I think you can appreciate the difficulty in giving advice. You should
make this decision based on your personal situation - and definitely
with advice from trusted advisors.


It is possible you will never need the insurance benefits. The
alternative, of course, is you could need it in two years, then you
would be so glad you had it.

If (1) your stockbroker is your financial adviser, and
   (2) you trust him, and
   (3) you can afford the premiums,

then I would say it is a good investment.

If not, you may need additional input from your physician and/or
someone whose advice  you respect to see if there is a better way for
you to make an informed decision.

I realize this isn't a clear or definitive answer - no Google Answers
Researcher is really in a position to give you one. This is more an
opportunity to give you additional information to help you make the
decision that is right for you.


Search Terms Used
==================
  - life expectancy figures
  - health care costs
  - senior health care premiums


I hope you enjoy a long and healthy life without ever having to deal
with anything remotely related to the topic of this question!

Regards,
Serenata