Long-Term Care is increasingly becoming an issue that needs to be addressed in a person's financial plan. Statistics Show 70% of Those 65 and Older Will Experience a Long-Term Care Event. Many people want to ensure they don’t become a financial burden to their family, or they want to ensure their assets are adequately protected.
Quantify the Risk
Long-term care is a very important but often overlooked area. It is identifying the real financial risk of needing care at some point in the future and then determining how much of you want to self-insure vs. how much risk to push off to the insurance company. Knowing the current costs of services in a particular area where you live and are most likely to retire is most important. At Henssler Insurance, we look at the actual cost of long-term care services today and factor in historical inflation to help quantify your total risk exposure. We break down these costs into categories, such as, “in-home care,” “assisted living” or even “facility care.” For a couple, the biggest risk is if one person suddenly needs extended care, which introduces new costs, while the other person maintains all of their originally planned financial commitments.
Develop a Long-Term Care Strategy
Statistics show us that fewer than 30% of American adults older than 50 have taken steps to address their long-term care risk. The basics of a plan include knowing your current spending patterns, the type of accounts and investments that make up your assets, as well as understanding your personal family medical history and risk tolerance. We have dedicated resources to help clients understand their risk. Together we can develop an appropriate plan to manage that risk.
Consider your Insurance Options
Today’s insurance market can provide great options to help you mitigate the risk of long-term care costs significantly impairing your financial goals. On one hand, you have traditional long-term care policies, which can do a great job of tailoring a solution to match the current and long-term cost of services.
However, much like homeowners or car insurance, you may never use the benefits if you never experience a qualifiying long-term care event. To mitigate this “risk,” an increasingly popular option is a “hybrid policy” that combines the characteristics of a life insurance or annuity policy and adds a long-term care rider. These valuable alternatives offer guaranteed premiums and benefits. Most like the idea that they will receive a benefit, either in the form of a death benefit or predetermined monthly long-term care benefit if needed.
Long-term care coverage is becoming an integral part of a financial plan. We advocate identifying and quantifying the risk, creating a plan or strategy, and then evaluating your insurance options.
If you have questions, contact the experts at Henssler Financial: