Farm Management Minute: Long-term care insurance

Farm Forum

Not so long ago, someone near and dear to me suggested that I look into getting a long-term care insurance policy. To be honest, the subject was near the top of the list of things I did not want to think about at the moment. However, this is no reflection on the administration and staff of the nursing homes across the state. My own father is a resident of a nursing home, and I applaud the staff for their constant care and dedication.

If you are age 59 or younger, you should really consider my advice to look into getting long-term care insurance, especially if you have not yet developed major health problems. A couple weeks ago, our instructor group attended a conference at Park Rapids, Minnesota and heard a presentation by Gary Hachfeld, who gave us some rather startling statistics from the University of Minnesota Extension.

What are the odds of losing your home to fire? The answer is 1 in 1200. Your odds of having a car accident are 1 in 240. The odds of having a hospital stay costing over $30,000 are 1 in 15. Very few of us would think of going without property insurance, car insurance, or medical insurance. The odds are 1 in 2 that you will need some kind of long-term care. One in 10 will have a nursing home stay of more than 5 years. Forty percent needing long-term care are less than 65 years of age.

You might be thinking that your spouse and/or family members will take care of you. Here are more statistics on caregivers (assuming in-home care): 42% care for their mother, 14% care for their father, and 13% care for his/her spouse. Forty-two percent reported that the care recipient resided in the caregiver’s home for a period of 3 years or more.

Primary caregivers reported that they experienced:

· 44% increased stress with spouse

· 27% stress with siblings

· 23% increased stress with children

· 20% reported less time with children

· 58% reduced savings for college education.

Caregiver’s health:

· Ability of immune system to fight disease decreases 18%.

· Caregiver’s life expectancy decreases 3 to 4 years.

· #1 health issue of the caregiver is depression.

If you are thinking of setting aside or saving money to cover your long-term care costs, you might consider that it is difficult to know what amount of funds will be needed to cover your care costs. The University of Minnesota Extension reports that, according to Genworth Financial, a semi-private nursing home room in Minnesota presently costs from $60,000 to $75,000 per year. The median figures for South Dakota are very similar.

Please bear in mind that I am not an insurance agent nor am I trying to sell you a policy. My goal is to cause you to consider using long-term care insurance as another tool to protect your ranch or farm assets. We at the S.D. Center for Farm/Ranch Management would like to help you with your financial planning. You may contact Jared Hofer, Will Walter, Dave Koupal, Kathy Meland, Roger DeRouchey or myself at 1-800-684-1969. Be sure to visit our website