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It's that time of year-time to check the feed supply and prepare for winter. Will the hay last until April…do any feed bunks need to be rebuilt….do the tank heaters still work? The "to do" list is long and the days are getting shorter.

It's no stretch to see where I'm going this month. Previously, discussions about financial planning have included a last will and testament, an accurate personal and business financial statement and the need for a financial plan. Did I mention that you have a financial plan? Uncle Sam wrote it-and unless you take action, that is the plan that will be implemented.

A major factor in any financial plan is to consider the costs of long term care. It is true, we are all living longer. That's the good news. The bad news is that the odds of needing long term care are increasing with the increased longevity. As stated above-the government has a plan-if you need long term care, sell/use up all of your assets and then you will be eligible for Medicaid. That's a little oversimplified, but close! It may have taken generations to build a successful agribusiness and only one generation to wipe it out. Whole farms have been sold to pay for the care of loved ones.

Fortunately, there is a solution. Long term care insurance has been available for over 25 years from very strong, main stream insurance providers. First, you need to understand that long term care does not start with nursing homes. Good long term care policies begin coverage at the time you need help in your home. Staying at home is usually everyone's wish-with proper planning, the financial part of the equation can be provided for with insurance.

The current national average cost for nursing home care is over $65,000 per year. The actual cost can vary greatly from region to region. In addition, at home care is around $30,000 per year. As you can see, it wouldn't take long to greatly diminish the assets you have worked hard to accumulate!

You should consider using a long term care (LTC) insurance policy in your financial plan if you are 40-84 years of age; have significant assets to protect; can afford the premiums; and are in good health and insurable. For a 50 year old couple in reasonable health, an annual premium of about $5,500 should be anticipated. Of course, that varies based on age and health.

A good LTC policy should provide a monthly benefit of at least $4,500 (quoted as $150/day); a rider for inflation (typically 5%); guaranteed renewability, and home care coverage equal to nursing home coverage. Typical coverage is for your lifetime as are the premiums. The premium may seem steep, but consider the fact that the larger companies that offer coverage have a history of not raising rates. In fact, one has not raised a contract rate for over 25 years. Of course, the rate goes up for new contracts, but rates for existing contracts have remained the same. All of the companies reserve right to raise rates on existing contracts--they can't bet the company's financial health forever.

So, how do you receive benefits? Need for care is based upon an individual's inability to perform six activities of daily living or "ADL's" for short. The six ADL's are an individual's inability to bathe, dress, eat, transfer (i.e. walk), or toilet, along with incontinence due to an illness, injury or cognitive disorder. Most policies have "triggers" based upon your inability to perform these ADL's. Usually, when you cannot perform two or three of the six without assistance, benefits can begin. Some companies require a doctor certification, others do not.

Long-term care policies have many different forms. Various riders can allow for "shared care" as a means to reduce the annual premium; others provide for a paid up policy for a surviving spouse if certain time limitations are met; or elimination periods (like a deductible, based on time) can be longer or shorter.

So why consider a long term care policy? Individuals entering a nursing home have an average stay of 2.5 years. However, the reality is that the need for care begins at home many years before entering an assisted care facility. Do the math-if a 50 year old couple has a premium of $5,500 for 30 years, they will pay $165,000. If one of them is in a nursing home for 2.5 years, the cost will be $165,000 in TODAY's dollars. That's why the inflation rider and a company's history of raising contract rates are so important.

For now, the most important thing is to ask for a quote. It may not be close enough to "winter" to purchase a policy, but you need to consider the cost and benefits to your financial plan. Maybe not today, but sometime in the future, your financial status may strongly suggest the need for a long term care policy to protect your assets and ensure you can afford the care YOU desire.

This article was written by Stephen Francis, a Polled Dorset breeder from Wilmington, IL. He is a professional financial advisor with Raymond James Financial Services, Inc. Member FINRA//SIPC and may be reached at 815-476-2105; or steve.francis@raymondjames.com; or on the web at sjfrancis.com.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Steve Francis and not necessarily those of Raymond James Financial Services. You should discuss any tax or legal matters with the appropriate professional.

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