The expected present value of lifetime health-care costs for a couple turning 65 in 2009 in which one or both spouses suffer from a chronic disease is $220,000, including insurance premiums and the cost of nursing-home care. Plus, there's a 5% chance they can expect to spend more than $465,000.
The comparable numbers for couples free of chronic disease, meanwhile, are substantially higher, at $260,000 and $570,000, respectively.
In addition, the Boston College report found that households that delay purchasing insurance until their health declines not only run the risk of higher premiums, but risk being denied coverage altogether.
Cheung said people need to consider buying a long-term-care insurance policy and Medigap insurance and factor such costs into their budget. He added that long-term-care insurance should be viewed more like auto or home owner's insurance and less like life insurance. Few consider those other types of insurance as a waste of money if they never have to use it. Instead, it's the price one pays to insure against the risk of fire or accidents. Same goes for long-term-care insurance; it's the price one pays to insure against the risk of needing long-term care.
But then there's the problem of trying to get a handle on long-term-care insurance costs and which policy is right for you. That's no easy task. Premiums for a long-term-care insurance policy run the gamut, according Jesse Slome, executive director of the American Association for Long-Term Care Insurance.
For those ages 50 to 54, the average premium is $2,236 per year, but premiums range from a low of $694 to $9,650. For those ages 55 to 59, the average premium is $2,372, but premiums range from a low of $794 to a high of $8,824.
Copyright © 2010 Dow Jones & Company Inc.
SEC Looks To Update ADV Part II
Form ADV, the core disclosure document for every RIA, needs some updating according Luis Aguilar, a commissioner of the Securities and Exchange Commission. That means the form will likely be on the SEC's radar in the near future.
"The need to update Part II has been clear for over a decade," Aguilar said in a speech at the Investment Adviser Association's annual conference in late April.
The SEC proposed comprehensive amendments to Part I and II of Form ADV in April 2000, Aguilar said. At that time, the agency adopted amendments to Part I, but the ones related to Part II went nowhere, and Aguilar indicated that the SEC might soon revisit the issue.
In March 2008, the SEC reproposed various amendments so that the form would give clients plain-English disclosures about advisors. Part II offers clients key information about an advisor's services, applicable fees, conflicts of interests and other information. It's the main document investors can tap for information about advisors they might want to hire.
"Unfortunately," said Aguilar, "the current form is sadly antiquated and a modern-day advisor's services may not correspond well to the limited number of options on the form. As a result, the resulting disclosure may not describe the advisor's business or conflicts in a way that investors can readily understand."