End of the CLASS Act and the Rise of Long Term Care Insurance

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The CLASS act (Community Living Assistance Services and Support) was another poorly designed and grossly inadequate government program. As a part of the Health Care Reform Act, it was to pay you a paltry lifetime benefit of about $50 per day when you became elderly or disabled and needed long term care. But, to receive this benefit in the future, it would have been necessary for you to voluntarily allow your employer take an undetermined amount out of your regular paycheck along with the Social Security, Medicare, and Income taxes that's already being withheld. It is good that the CLASS act no longer exist. May it rest in peace.

Still, with the elderly being the most rapidly growing segment of our population, it once again elevates the need for Long Term Care insurance (LTCi). This type of insurance begins when your doctor certifies that you are unable to perform at least two of the six activities of daily living without assistance and that this disability is expected to last at least 90 days. These activities include:

• Eating
• Toileting
• Transferring
• Bathing
• Dressing
• Continence

For you and your family, the amount of benefits per day, the waiting period, and the length of the benefits becomes essential information. As an example, you can choose a daily benefit of $200 per day, a waiting period of 60 days, and benefits to last for a lifetime. The age in which you apply, your state of health, and the above essentially determine the premium that you will have to pay.

Although the cost of long-term care may vary from state to state, across the country the cost of long term care, specifically assisted living and nursing home care, can easily exceed $50,000 a year. Recently in Illinois, an Assisted Living Facility (private, one bedroom) costs $41,880 and Nursing Home Care (private room) $63,875 or a (semi-private room) $54,750. Check out these costs in your state.

It is clear this that for most families it would be financially devastating to have to personally pay the cost of a family member's long term care in one of these types of facilities. The family may try to care for the beloved member at home, but often, for variety of reasons, it just can't be done.

The end of the CLASS Act once again leaves LTCi as the only way to get the benefits you need if you become elderly and disabled or just disabled. As a conscientious family member, you do not want to become a burden on other family members when it can be prevented. After all fitting it into a financial plan may just require some forethought and sincerity.

Get Down Payment Assistance to Buy Your New Home

Even in this economic climate, down payment assistance remains available. With the mortgage interest rate continuing to be historically low and the prices of homes 30% to 40% lower than just a few years ago, its time to buy your new home.

Almost every state has a home finance agency that offers down payment assistance. Its up to you to explore what the criteria are for becoming eligible and to meet the requirements.

If you live outside of Illinois go to the State Mortgage Finance Agencies to find out what's available in your state. If you live in Illinois, go to the Illinois Housing Authority for assistance 

In addition, here are some more sites that offer a variety of housing assistance in Illinois, New Smart Move, METEC Partners , North Shore Trust, and the Greater Chicago Housing and Community Development Organization.

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What You Need to Know About Appraisals

An appraisal is a report that helps to determine the market value of a property. Appraisals compare similar homes in the area to substantiate the value of the property. The term "comps" is often used in reference to this report. As required by the lender, the appraiser's report can be prepared by either a simple drive by the property to a full blown inspection with photographs of the real estate with color pictures.

Since 2009, the appraisal game has changed. Whereas before then the appraiser was often a local individual, now it may often be a non-local individual. This individual may be unfamiliar with what's going on in the neighborhood and the neighborhood's norms. Also, lenders are requiring more market information, including more facts about the structure, more photographs to document the findings, and more demands for "comps" to help establish the baseline for the home's value.

So, be present when the appraiser is doing his work. Ask about the appraiser's familiarity with the neighborhood and recent local sales to make sure that the house gets apples-to-apples comparison. Strive to be in agreement on what exactly constitutes, "the neighborhood". Furthermore. it doesn't hurt to have the real estate agent there also.

I will be going into more of this in a future post.

What has your experience with the appraisal process?  Let me know.