Why People Buy This Insurance
By: Source: AARP Bulletin Today Date Posted: 2003-06-27 16:14:40
Insurance agents and financial planners say the impetus for many people to buy long-term care insurance often comes from watching what happens when loved ones cannot care for themselves.
Consider Connie Mueller, 48, a freelance advertising writer in Rumson, N.J., and a mother of young twins. She saw what happened to her parents when her father, a professor of chemical engineering at Princeton University, fell victim to Alzheimer's disease in his 50s, requiring him to spend his final years in a nursing home.
During his nursing home stay his insurance ran out, plunging Mueller's parents into a deep financial hole. "This was financially devastating to [them]," says Mueller. "My mother was eating peanut butter sandwiches" because her husband's care cost $5,000 a month.
Mueller vowed she wouldn't suffer the same financial fate as her parents. She and her husband, 50, both have comprehensive policies that would pay up to $180 a day in nursing, assisted living or at-home care benefits, along with a 5 percent annual compound inflation rider intended to ensure that their benefits will be enough decades from now. The cost: about $3,900 a year for the two policies.
The type of policies the Muellers bought also reflects a huge change under way in the industry. Today coverage offered is far more comprehensive and oriented toward in-home care, rather than the nursing home-only coverage of the past.
For the Muellers the decision to buy long-term care insurance wasn't just a financial one. "I really feel like I'm buying peace of mind," says Connie Mueller.
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