As it does with many personal finance issues, divorce can complicate things when it comes to health care in old age. As you prepare for a new, and single, chapter in your life, be sure to prepare for a time when you may no longer be able to care for yourself.
Couples who divorce late in life have unique concerns and needs. Traditionally, according to Pacific Divorce Management, a divorce financial planning services firm, the day-to-day care often necessary in old age was provided by a spouse. When a married couple splits up, they will each be left without a companion to provide in-home care for free and perform activities like preparing meals, administering meds and helping with daily activities like bathing and dressing. Medicare does not pay for these things either.
Long-term care (LTC) insurance can provide money to pay for skilled nursing care as well as nursing home expenses. It can cover everything from help with daily activities, such as transportation to and from medical appointments or remodeling your house so that you can be cared for at home.
LTC insurance can have another use, according to Mensh Insurance: Protecting assets. In many divorce settlements, the highest-earning spouse must provide income to the other. If all of the highest-earning spouse’s assets are sucked up by long-term care expenses, the other will lose that income.
The American Association for Long-Term Care Insurance (AALTCI) suggests that LTC insurance may be especially important for single and divorced women. Because of their longer life expectancies, they can rack up more long-term care costs than men. Women spend twice as many years as men in a disable state near the end of their lives, according to AALTCI. And of all the LTC benefits paid out in 2007 ($3.5 billion), two-thirds went to women.
In some cases, divorce actually may be a desperate solution to long-term care needs. A March 2010 AARP article describes the plight of a married couple struggling to pay for the husband’s care. If he and his wife had to spend their savings on the care he needed for his dementia, their assets would have been completely depleted. The couple divorced so that he could qualify for Medicaid.
LTC insurance could have provided for much of the expensive care that was depleting the couple’s savings. So, whether you’re preparing to spend your golden years solo, or hoping to keep your marriage intact when your spouse’s health is falling apart, LTC insurance can help you meet these challenges head on.