Who Should Buy Long-Term Care Insurance

U.S. Treasury Bonds

Maturity

Yield

Last
Week

Last Month

5 Year	4.36	4.43	4.54
10 Year	4.45	4.51	4.60
30 Year	4.65	4.71	4.79

Treasury Market Summary: Stumbling in Wake of Stocks : The market tripped all over itself today while stocks soared & talk of asset allocation was blamed...again. The sell-off was helped along by China talk, with a slightly better confidence report just gravy (for bonds slipon). Hedge-funds were reportedly heading out to join the stock party as the 10-yrs submitted & extended the week's sell-off to a 15 basis point rout, doing about half that dive today. The curve reached for the least inverted stance on the month, with the 2-10-yr yield spread running back to -1.2, heading out at -1.5. Treasuries were long coming in with many pointing to seasonal factors even as rates look to be rising globally & officials' talk generally has that slant. Nosing around for confirmation of rumors of potential hedge-fund woes were greeted with laughs, not too surprising as those rumors circle like vultures on size moves (CRB did all right). Stuff like that will be going on with talk of G8 whining about regulation (not that anyone listens...). Any hedge mutterings, however, obviously did not help bonds. One long time bond watcher laughed "late on a Friday? They could at least have the courtesy to [blow up] on a Monday morning." The buck ends the week a little offered as the euro rebounded from another test of 1.3465 & the yen is holding the dollar below 121.4000. Spot gold, conversely, is trying to end the week on a slightly bid tone at 661.65 (+4.00) after troughing around 653.83 yesterday & crude oil is going out at about 64.92 (+0.06). Next week will likely be quiet with data not making an impact until at least Thurs & Fed-sters scattered throughout.

Economic Indicators for this week that could impact the mortgage or real estate markets include...

Durable Orders	May 24
Initial Claims	May 24
New Home Sales	May 24
Existing Home Sales	May 25

Who Should Buy Long-Term Care Insurance?

Long-term care insurance policy is not for everyone. For a limited population, long-term care policy makes sense as an affordable and worthwhile form of insurance. Buying long-term coverage should not cause financial hardship and force you to forego other financial needs. Whether long-term care insurance is appropriate requires a full financial analysis. For many people it is not a good idea.

Although the need for long-term care can arise gradually as a person ages and needs more and more assistance with activities of daily living, for most a stroke or a heart attack will be the precipitating need. Those with acute illnesses may need nursing-home care for a matter of months, while others may need care for years.

In any specific case it is difficult to predict who will need long-term care, but studies point out the likelihood of needing such care. In one study, it is anticipated that 43% of those who turned age 65 in 1990 will enter a nursing home at some time during their life. Of those who live to age 65, nearly 1 in 3 will spend three months or more in a nursing home and 1 in 4 will spend one year or more in a nursing home. Only 1 in 11 will spend five years or more in a nursing home.

Women outnumber men in nursing homes according to this specific study. Thirteen percent of the women as compared to 4% of the men were projected to spend five or more years in a nursing home. And obviously the risk of needing nursing home care increases with age.

After assessing the odds that you will need long-term care, consumers must stringently analyze the reasons for a policy and the ability to pay for it for the balance of a person's life. It makes no sense to buy a policy unless it can be paid every year until death and far too many policies are cancelled by policyholders on fixed incomes as they grow older and their premiums increase accordingly.

Buying a policy is a function of your age, health status, overall retirement objectives, income and wealth. If the only source of income is a minimum Social Security benefit or Supplemental Security Income (SSI), do not purchase a policy. If paying utilities, food or medicine stretches a budget; this person should not purchase a policy.

Long-term care policies are only for people with significant assets they want to preserve for family members, to assure independence and not burden family members with nursing home bills. Never buy a policy if paying the premiums will be a problem. If you have existing health problems that will result in the need for long-term care, such as Alzheimer's or Parkinson's disease, no company will sell you a policy because the probability of losses exceeds the probability the carrier will earn a profit on its contract with you.

One should consult with a qualified insurance planning professional prior to implementing any insurance planning strategies. If you are an estate planning, real estate, mortgage, tax or financial planning professional receiving this newsletter, please call our office and introduce yourself to us. We are always seeking to grow our referral network and expose more service professionals to our client base.