“I have chosen to be happy because it is good for my health.” – Voltaire
Here’s a question:
Did anyone know that November has been designated Long Term Care awareness month?
I certainly didn’t and I must admit it’s not a topic I like to think about much. I don’t feel very old, but my driver’s license tells me a different story!
With each passing birthday, perhaps a bit more thought goes into preparing for our elder years. Maybe long term care insurance crosses your mind, followed by a quick, “Oh, I’ll worry about that later.”
But frankly it’s never a bad time to start thinking about it, and to become more informed about your options.
Long Term Care Insurance (or LTCI) has changed a lot in the past few years. Insurance companies seem to have realized they need to offer more enticing options to savvy seniors.
Here's what makes LTCI different from “regular” medical insurance. LTCI goes beyond what a typical medical insurance policy covers. It can provide assistance if you are diagnosed with a chronic illness or disability that leaves you unable to care for yourself for a long time, perhaps forever.
Here's something to be aware of – and it’s incredibly sad, too. If you need long term care – and you’ve not planned for it – paying for that kind of care can quicky wipe out a lifetime of accumulated assets. Your home, your investments, your legacy – all of it can easily be exhausted by an extended stay in a long-term care facility.
As we all know, getting older…isn’t cheap!
So how can you protect your spouse, your children, or those to whom you wish to bestow your assets? I know this is a complicated subject, but I have several relatively easy questions to ask yourself today that might help you think this through.
First, ask yourself: When does LTCI make sense for ME?
The answer is different for all of us. Consider these points:
- Self-funding of long-term care is not realistic
- You have accumulated a sizeable amount of assets
- You wish to protect as much as possible to pass on to your spouse, children, or other heirs
- You want to remain in control of your life
- Then, LTCI might make sense for you
Next, ask yourself: When should I buy LTCI?
Well, here’s the short answer. If you are between the ages of 50 and 65, you should at least consider the benefits of buying LTCI. Why? Well, the longer one waits, the more costly the coverage will be…and yet, you don’t want to start too early, either! It’s tricky.
Keep this in mind: the odds of needing LTC before age 65 are low.
Now, you’re probably wondering: So, how many options do I have, really?
And the answer is – a lot. Keep these hints and tips in mind:
- Traditional LTCInow offersflexibility so you candesign a plan that addresses your specific needs.
- Traditional LTCI may qualify for your state’s Partnership Program, meaning that every dollar in benefits paid from a LTCI policy will allow you to protect a dollar of assets should you ever need to qualify for Medicaid.
- Life Insurance with LTC Riders. You can add a rider to a permanent life insurance product. Of course, this comes at an additional cost, but it can allow you to use a percentage of your death benefit should you need LTCI instead.
- Hybrid Products or Linked Benefit Products - options to use a life insurance policy or annuity to create atax-free LTC benefit
(Please know this is a very brief description of very complex products!)
Why consider Long Term Care Insurance?
- Removes the burden of your loved ones and family having to make stressful decisions about you and your care
- Maintains control over planning for this situation
- Gives you a sense of peace knowing you have a plan in place
- We know – it is an expensive proposition. And like any insurance, if you’re a fortunate soul, you may never have the need to use it!
Alright, so I’ve thrown a lot of information at you in the name of “celebrating” Long Term Care Month. So, how about some perspective?
No one enjoys spending money on a new set of tires, but we recognize tires are the foundation of a well-performing, safe vehicle. New tires are not only a good idea, but they are also absolutely necessary to ensure OUR long-term safety as we drive that vehicle.
Likewise, LTCI provides a foundation of security and a sense of calm knowing you have a plan.
However you’re celebrating Long Term Care Insurance this November (a party, perhaps? A wild all-nighter? A vacation around the world??), keep this in mind: At WatersEdge, we believe that a conversation about LTCI should be a part of the financial planning process with your advisor.
It might notbe a fun topic, but it’s so much better to face difficult conversations head on than to be looking for solutions when it really is too late.
If you’d like to have a conversation with Susan or me about your options for Long Term Care, please don’t hesitate to reach out!
More information from LPL Financial: Guide - Long Term Care Insurance