I must be missing something (non valk)

[solo1]

In Dave Ramsey's financial advice column, a son asked Dave whether his elderly mother should take out long term care insurance. She only has a 1.5 million dollar in assets with no debts.

Dave said she should.  Interesting, since my main asset is my good looks and even that's questionable.

Is 1.5 million bucks considered chump change today (by other than the Clintons and the Trumps, and other assorted pols)?

I sure as hell can't brag about my financial status based on that standard.

[Serk]

My take on it:

Without long term care insurance, if/when she goes into a nursing home she'll burn through that money fast, and if she goes on medicare the government will take that money fast as well, so to protect the assets for the next generation, I can see the argument in favor of long term care insurance.

Decent care in a nicer nursing home can run $80,000 - $100,000 or more a year, and a person could easily live 10-15 years in that situation.

[solo1]

Serk, from what I've seen in nursing homes, and I've seen many, not all have decent care.

In fact, required 24 hours nursing care, in many cases,  is really not living. The Quality of Life is missing. However, you're right about the costs. Some say that long term care insurance is a racket, what with the extreme penalties due to age and the extreme costs. Of course, the underwriters would disagree with that.

However, any long term or immediate medical care can also easily bust the budget, even with health insurance and at an earlier age.

So, I guess that you're right and so is Dave.  However, I think that you are talking abut Medicaid, not Medicare. I could be wrong.

[Jess from VA]

I thought the fair plan was when you got too old to care for yourself, you moved back in with your kids, and become a burden to them and get some payback.

Fortunately, I don't have any kids.  So I'm still wondering about who I'll move in with.   

Maybe a sorority house could make me their mascot.   (He's a nice doggy, but I wish he would stop humping my leg.)

[FLAVALK]

My take on it:

Without long term care insurance, if/when she goes into a nursing home she'll burn through that money fast, and if she goes on medicare the government will take that money fast as well, so to protect the assets for the next generation, I can see the argument in favor of long term care insurance.

Decent care in a nicer nursing home can run $80,000 - $100,000 or more a year, and a person could easily live 10-15 years in that situation.

This is spot on

[RDAbull]

Wayne,
The CPA, CFP part of me tells my clients not to look at it as long term care insurance, but rather as portfolio insurance.  If she would like to leave the 1.5 million to the kids, this is a way to cover the bulk of the cost of long term care.  Granted, she may never need the coverage, but her house might not burn down either and I would bet she has insurance on it.  In some cases the $1.5 might be the value of a family business that the kids are involved in but don't yet own.  To protect the business (farm) she should have it.
If you are very rich, you don't need it.
If you have no estate to pass on, you don't need it.  Medicaid will cover LTC cost.
Those in the middle should consider the LTC insurance if you would like to pass assets along to kids.
MHO

[solo1]

RDAbull.  Thanks that explains it.

Learn something new each day on this board.