Will you be forced to pay for your parents care?

For many people, when they get older, they may need some extra assistance. Whether this is in their home supporting their every day activities, or living in a home where full-time staff and professionals can assist them. One downside to this care is that it can be expensive, especially if it is needed on a full-time basis (see below). Thankfully, there is an insurance product which can be used to help pay for these expenses – Long Term Care Insurance (LTC).


How much does full-time care cost?

Courtesy of USAA.org

LTC insurance has been around for a number of years, but insurance companies have found they did not price it correctly in the initial years compared to the amount of claims they had to pay out. Even the premium in the graphic above would be cheap – see below for a more recent projection. With some companies withdrawing coverage altogether, others have been forced to increase premiums dramatically. Another way insurance companies have been getting around this problem is to provide permanent life insurance with LTC riders. This would enable people to use the value of the life insurance (or at least the cash value inside these policies) to pay for the care they need.


How much will it cost a married individual to hold a LTC policy with benefits for 3 years?


Given that LTC care insurance has been getting more expensive in recent years, many policyholders have dropped their coverage. Those who were interested in holding a policy may have since stopped looking. If they require care, which is not typically covered under Medicare, they would be hard-pressed to pay the bills they rack up. But without declaring bankruptcy, this bill is still owed.


But now children can be on-the-hook for their parent’s bill

Legislation has been passed in 29 states in the favor of the caregivers. The “Filial Responsibility” law enables nursing homes and other institutions to be able to sue children of patients in order to collect on unpaid living assistance bills. (While not a law in Illinois, it could be enacted at a future date). This legislation has been around for a while, but it was not thought to be easily enforceable – until now. With Medicaid being harder to qualify for and LTC policies becoming more expensive, these outstanding bills (and the lawsuits that follow) could become more commonplace.

So while it has been a legal responsibility of a parent to financially provide for a child, it is now going to become enforced that a child become legally responsible for the financial costs of their parents.


How are you prepared?



You can read more about developments in the LTC insurance field here

States with Filial Responsibility Laws



Source: http://www.elderlawanswers.com/son-liable-for-moms-93000-nursing-home-bill-under-filial-responsibility-law-9873