Bleeding Money

Dear Jewish Fairy Godmother:

Help me with a decision about money. A few years ago, just before I
turned 65, I decided to get long-term care insurance. The price was
high but less than it would have been if I had waited and had only a
ten-year premium payment period (relatively rare). But now, as I
review my financial priorities, I realize that $4K a year is more money
than I want to continue to spend for a policy that I may never need,
and that will support the last three years of my life, which, while it
might be closer still seems far away, while my more immediate needs
are more interesting and compelling. I have no children or partner
(though you are welcome to my two exes I supported for decades).


In my recent serious illnesses I have relied on friends and neighbors,
whom I know are relatively uninterested in wiping my butt when I’ll
need it and whom I would not expect to burden with that. But I’ve
developed a plan to divide my home into an uneven duplex and to
offer free room and board in exchange for caretaking. I bought the
policy from the newly-minted insurance-salesperson son of a close
friend, whom I think made some mistakes in his relative ignorance,
including failing to point out that should I ever wish to cancel I
wouldn&'t have any kind of built up equity in the policy. So do I
abandon the four years of premiums paid and trust that I may never
need long-term care beyond my theoretical tenant, or do I keep
paying for another six years, which is enough to pay for the duplex

Bleeding Money

Dear Bleeding Money:

First you should ask your agent (who probably knows more now) if it is
too late to add a forfeiture rider to your policy. I’d bet money it would
require a new medical assessment, and could be expensive relative to
continuing to pay for the next six years. Only you can do the financial
cost benefit analysis and know whether you even have access to the
money for premiums.

Think about the money you spend each year on home or car
insurance. Most companies don’t give you a refund if you don&'t have
an accident or your home doesn&'t have a catastrophic event. Most of
us are happy never to speak to our agents, and some companies do
offer a percentage rebate for years of zero claims.

You sound happy not to be married any longer. I&'d suggest viewing the
premiums as a “single tax.” In your head, reframe the premium
amount as a roughly $10 per day cost you’re paying not to have a
partner you&'re supporting. And any future caretaker you’d install in a
future duplex will be happy to have help wiping your tush and other
sundry functions, assuming you need that done for you.