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assistance with activities of daily living, such as dressing, eating, and bathing. Community based care, such as adult day care, is also usually covered. “Nursing home only” policies are available and are less expensive. They are worth considering for persons whose living situations make it unlikely they would remain at home if they should require care. Other key elements of a long-term care policy:
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Daily benefit: the maximum dollar amount a policy will pay: some pay the full daily benefit regardless of the charges you incur (“indemnity”), other policies pay only actual charges up to the covered amount (“reimbursement”). Benefit period: the length of time for which benefits are payable Elimination period: the number of days at the start of a claim for which no benefits are payable (also known as the “waiting period or the deductible”); typical options include 0, 30, 90 and 180 days.
Other optional benefits, or riders, that are available include:
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Inflation protection: this optional policy feature increases the daily benefit each year to help keep pace with the increasing cost of long-term care; this is an important consideration for anyone younger than mid-70’s • Non-forfeiture benefit: an optional benefit that allows the insured to receive some type of benefit from the coverage if the policy is surrendered. Some final advice... Long-term care insurance provides an excellent alternative to personally financing the cost of long-term care, but it is a complex product with numerous substantial and subtle variations from company to company. Don’t buy this product in an educational vacuum. Work with an insurance agent who is knowledgeable about longterm care issues and familiar with a variety of long-term care insurance plans. The agent should take the time to learn about your personal situation, answer your questions, and should adequately explain the plan and features he or she is proposing. Know what you are buying - and why you are buying it. Review several different long-term care insurance policies. And perhaps most importantly: involve your family in a discussion of long-term care issues and a decision to buy or not buy long-term care insurance - while you are healthy. They will almost certainly be impacted should the need for long-term care arise.
REVERSE MORTGAGES
Reverse mortgages are designed for homeowners age 62 and older and living in their homes as their primary residences. The reverse mortgage is a new tool for retirement planning. It is a way to turn your home into a source of cash. Before reverse mortgages, there were two ways to get cash out of your home: by selling it and moving, or by getting a home equity loan and making the required monthly payments. Now there is a way to turn the equity in your home into cash without making loan
payments, and you continue to live there. This is why the term “reverse mortgage” is used. It is a type of mortgage that works exactly the opposite of the traditional mortgage we used when we bought our homes. Instead of paying the lender, the lender pays the homeowner, who retains ownership to the property, continues to live there, and makes no monthly repayments. The reverse mortgage is a loan with a rising balance and must be repaid when the homeowner leaves the house, either by selling it and moving, or by passing away. The money from a reverse mortgage is not taxable and does not affect Social Security and Medicare. The list is unlimited: travel bills, remodeling, redecorating, hobbies, medical and health care expenses, property taxes, emergency funds, college tuition for grandchildren, car purchase or repair, and the list goes on and on and on..... The amount of money available for a reverse mortgage varies for everyone. No two homeowners are alike. Information can tailored to your specific circumstances. There are three reverse mortgage programs for Montanas: the Federal Housing Administration Insured Reverse Mortgage (HECM), the Fannie Mae Homekeeper, and the State of Montana’s Reverse Annuity Mortgage (RAM). For free information and referral, call Justin Schedel, Montana Board of Housing - 1-800-761-6264. Montana Board of Housing’s Reverse Annuity Mortgage Education Tool Program, Missoula Aging Services 337 Stephens Ave.............................728-7682 or 1-800-551-3191 www.missoulaagingservices.com
The Information and Assistance Staff at Missoula Aging Services is certified by the Montana Board of Housing to provide counseling on the MBH Reverse Annuity Mortgage. RAM counselors can meet with you to explain and define how a reverse annuity mortgage works and how it might benefit you. This is not a sales pitch, but an educational tool for people interested in the program.
ESTATE PLANNING
If you don’t plan the division of your estate, the government will do it for you. You may also suffer unnecessary estate taxes. Trusts, wills, charitable gifts, tax-exempt gifts and insurance trusts are all means for controlling your estate. By using effective estate planning techniques you can direct your estate to the people or organizations you would like to benefit. Find out how to protect your estate. Consult the yellow pages for a complete listing of financial planners, attorneys, accountants and insurance agents.