As we age, most people will reach a point where they no longer can actively participate in the farm business. When that time comes, the farm business needs to adjust leadership and the family needs to figure out how to pay for the needed care.
To pay for the care, insurance is often an excellent tool, but lots of families don't use it for this purpose.
Americans buy insurance on all sorts of things, but only 2.5% of Americans have long-term healthcare insurance to pay for expenses related to old age care. Yet, every year 11 million Americans need some long-term healthcare services.
The U.S. Government Administration on Aging says that a person turning 65 today has a 70% chance of needing some long-term healthcare services. It may be medical help, maybe other kinds of services.
Part of a responsible legacy plan is to provide for the financial burden this will create for your family. Insurance is just one tool to consider, but it's a very important place to start thinking.
Here are five reasons to consider long-term healthcare insurance:
1. To Protect Assets – The average cost of residential long-term healthcare services of all kinds is 68,793 per year nation-wide and 70,879 per year in Minnesota. The average stay is 3.7 years for women and 2.2 years for men. Moneys from insurance benefits replace savings that would otherwise be spent down to meet this challenge. One of the biggest threats to a family legacy is catastrophic end-of-life costs.
2. To Relieve the Burden on Family – Without insurance to pay for care, many families rely on family members to help. The AOA says that one in four adults was an unpaid caregiver for an adult or child in 2009. Often the primary care giver is the spouse. With insurance benefits available, a healthy spouse has the option to use outside resources. Spouses who are primary caregiver for a partner often see a decline in their own health.
3. To Stay Home Longer – Most Americans receive some care in their homes and would choose to stay at home longer if they could. Sometimes all they need is in-home help with specific tasks. Insurance benefits often cover these services.
4. To Get High Quality Care – With insurance proceeds available, more people are willing to pay for needed services, so quality of life is better. People often access more services sooner AND they get to choose WHERE they stay when they move away from home.
5. To Maintain Independence for you and Your partner – Having long-term healthcare resources means you are free to choose your lifestyle. It also means that if one partner needs extra care that the other partner is NOT required to provide that care. The healthy partner can make their own choices.
The U.S. Department of Health and Human Services offers a free website with tools and resources. Find it here. If this blog has got you thinking about your own situation, get in touch with me at [email protected]. I am always happy to visit with folks working on their transition process. I'm passionate about every farm in America having a successful farm business transition plan.
The opinions of Rich Dunn are not necessarily those of Farm Futures or the Penton Farm Progress Group.