Farmers Increasing Interest in LTC
We know that the nations' farmers are having a good year with commodity prices up more than ever. But in good and bad times, a common question that farmers have is what will happen to their family operation when a patriarch or matriarch must enter a nursing home, or otherwise need long-term care (often at home).
Today Agri News has a piece titled Is your farm protected from the nursing home? where the subject is covered in great detail. One tid bit they include that I think all readers will find helpful is posted below:
Another important factor with long-term care is determining if you should add a "cost of living" rider. This referred is referred to as a 5 percent cost of living adjustment.
For younger people (under 70) this can be a valuable consideration. Using the simple rule of 72, an investment will double when multiplying years times the rate or by figuring the other way and dividing the interest rate into 72. In this example, if you had a 5 percent COLA rider on your policy, (72 divided by 5 percent = 14.4 years) your coverage would double in about 14 years.
So essentially, $100 of coverage would multiply to $200 of coverage 14 years later. Therefore a 50 year-old who adds a 5 percent COLA rider could easily have 28 years or more before they need nursing home care. As a result the policy they purchased with a benefit of $100 a day would be worth $400 a day by the time they reach age 79.
It's hard to believe, but true. Today I was talking with a client in Ft Lauderdale, FL who said her mother was in a nursing facility at the age of 92 and was spending $9,000 per month. While this comes out to $300/day, which is on the high side, it does point out the high cost of long-term care insurance costs.
