The burden of long term care, more often than not, falls on the children. You should consider taking out a policy on your parents to cover that cost. You can be the owner and the beneficiary.
Let me explain. Long term care expenses affect more than two-thirds of retirees in this country. And they need that care for 2.5 years on average. Typically, skilled nursing care costs anywhere from $100-$200 PER DAY. Here's what those numbers look like: $150 per day for 900 days = $135,000 in costs for skilled nursing care. Obviously most retirees aren't prepared to pay for that out of their pocket. In most cases they end up liquidating most of their assets AND needing the assistance of children to cover those costs. Often the children covering those costs are also trying to get their kids through college. It can cause some serious financial pain.
So, what's the solution? Insure your parents while they're still young and healthy enough to get the insurance. Here's one simple plan many of my clients have opted for. Buy a life insurance policy that includes coverage for what's called "chronic illness". Basically this means the life insurance will pay out the death benefit while the insured (your parent) is still alive if they have a chronic condition that causes them to need professional care.
When your parents have a policy like this, there are three possible outcomes:
Mom/Dad lives a long and healthy life. Most of these policies accumulate a little cash value that can be used for anything from a fishing trip to home repairs and updates.
Mom/Dad lives long, but needs care. The death benefit is advanced to help cover the costs of the care. This allows you to get your mom/dad the best care available.
Mom/Dad passes unexpectedly. The policy pays out like a regular life insurance policy and you have the funds you need to take care of your mom/dad's final affairs.
These policies are usually quite affordable and can help you and your parents avoid the potential financial pitfall that Long Term Care can be. Nobody likes to think about this sort of thing, but having a financial plan in place long before the need arises can make the last years the best years. Call or schedule an appointment, and we can help you evaluate your needs.