Considering Long Term Care
Ages 50 – 70 (or sooner)
It’s about your loved ones…
With healthy living and today’s medical progress, there is a good chance that you may live a long life. At some point, you may need assistance to get through your day safely. This could mean someone to monitor your movements, or maybe to assist you with eating. It could be at home, where most people would rather stay, or in a facility if medical oversight is needed. This is Long Term Care, or LTC.
If that time comes, who in your family might have to put their life on hold to provide care for you, or to finance that care?
It’s important to consider these things ahead of time and to have a plan. Then it’s time to consider what your plan might cost, and how to fund it. Once you need care, it will be too late to put into place a financial product in place to address Long Term Care costs.
If you don’t address funding Long Term Care, here’s a thought: If a portion of your portfolio isn’t allocated to Long Term Care, then all of your portfolio might end up being allocated to Long Term Care.
The sooner the better
When deciding on a funding mechanism for Long Term Care, it’s best to put it in place early. Each year you delay, you face two issues:
- Costs are higher the older you are when you start a plan
- You need to put Long Term Care financing in place while you’re still healthy, as you may be declined later for health reasons
If you think Medicare will pay for Long Term Care, think again
Medicare has some very limited post-hospitalization skilled nursing home benefits. It is not intended to pay for Long Term Care in the broad sense. Medicaid, on the other hand, may pay for Long Term Care. But because Medicaid is a program for the poor, you will have to first spend down virtually all of your assets to qualify. This is not a “plan” that most people want to implement.
You have more options today than in the past
If you have adequate savings, you may think of “self-insuring” for Long Tern Care cost. However, you may be “double counting” assets. If assets are allocated to producing income, and you use those assets for Long Term Care, your income will decrease.
Standalone LTC Policy
Standalone Long Term Care policies offer the most benefit dollars for each dollar paid in premiums. There are many new products that can be funded with anything from monthly payments to a single payment. These policies create a “pool” of dollars specifically to pay for Long Term Care costs.
Linked Benefit Policy
A number of solutions are now available that “link” Long Term Care benefits with other benefits, such as life insurance or annuities. Depending on family and financial specifics, one of these solutions may offer a good solution for Long Term Care costs.