Thursday, I wrote a word or two about what people think of as ‘nursing-home insurance.’ Today I realized that one of the many clippings I’ve been carrying around, meaning to write about, is Jonathan Clements’ recent excellent analysis in the Wall Street Journal. Basically, he makes the point that if you’re poor you don’t need this coverage (you’ll qualify for Medicaid) and if you’re rich you don’t need it (why pay someone else to take a risk you can afford to take yourself?) and if you’re in between, you should consider two things (well, more than two things, but these among them): First, that you should not buy more coverage than you need. If the local nursing home costs $60,000 (in his example), you may need to buy only $15,000 of coverage, because Social Security might provide $25,000 a year and you might have a $20,000 annual income from other investments or a retirement plan . . . leaving (in this example) just $15,000 a year to make up with insurance. Second, that you can cut your premium sharply by accepting a one-year deductible – meaning that you agree to pay for the first year entirely by yourself. This makes sense, if you can afford to do it, on the same premise: why pay someone else to take a risk you can afford yourself?

Mike Gavaghan: ‘Your readers looking for more information on long term care insurance can also ‘Ask Less.’ [Click on him to the left of the previous paragraph.] That’s exactly what I did over the summer and ended up getting policies for my wife and me through State Farm. As you said, the premiums are pretty steep, and I’m not yet convinced the coverage reaches the same level of importance as, say, disability and life insurance. But, I also decided that I don’t need enough coverage to cover all of my potential long term care costs. I only got enough coverage to merely subsidize my likely long-term care expenses and minimize how much I’d need to take from the nest egg.

‘The MostChoice.com website was a good read. I seem to fit the profile of the sort of person they’d recommend long term care insurance to – except for age. When we bought the policies, I was 30 and my wife 38. Maybe we’re too young and too far away from senility to justify getting the coverage now [yes, I think so – A.T.], but we’re still at risk for crippling illnesses and injuries. If I got hurt, my disability insurance would help my wife cover the living expenses we already incur, and my health insurance would pay medical bills. But, there are a lot of other expenses that wouldn’t otherwise be covered like home nurses and hospices.

‘I’m likely to cancel the policy in a few decades. If I can build a sizeable enough nest egg, I won’t need the coverage. But, for today, I’m just trying to insure against a loss I’m not able to absorb easily.’


Tim Couch: ‘Have you seen the cartoon in the New Yorker? Two Afghan soldiers sitting around, one says ‘If you still want to belong to an organization dedicated to killing Americans, there’s always the tobacco lobby.”

☞ The good news for the tobacco lobby is that the current administration has dialed way back on previous efforts to annoy the industry, and is in fact helping it to sell more of its fine product to our friends in foreign lands.


Michael Young: ‘The Bush administration has proposed cutbacks on Internet access subsidies designed to bridge the ‘digital divide.’ Gotta make room for those tax cuts for the wealthy.’


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