Planning for Long-Term Care: A Crucial Step
by Alicia Wanek | Writer
You may have heard the saying recently that “50 is the new 40.” We seem to have more vitality, healthier diets, and longer lifespans than the previous generations. However, living longer while aiming to retire by age 65 means our finances need to endure for a much longer period, and the chances of requiring some form of long-term assisted living or nursing facilities increase as life expectancy rises. How can we effectively prepare for the financial pressures that come with aging?
Real-Life Example: A Family’s Journey
Let’s consider a scenario involving an elderly couple who raised five sons, all now leading families of their own. They continued living in the same house for many years until the husband fell ill and passed away after a brief illness. As their mother exhibited a decline in cognitive health, the sons decided to assist her in moving to an assisted living center. Thanks to their father’s foresight in purchasing a long-term care policy years earlier, which covered $7,500 per month for her care, the family saved approximately $350,000 before her passing.
Insights from Industry Experts
A recent discussion with Bobby Davidson, a local independent insurance broker, and Steve Davis from Insurance Designer, a prominent insurance wholesaler, brought to light some emerging trends in long-term care options. With over 50 years of collective experience in the insurance sector, they have witnessed how thorough planning can relieve burdens for families.
Steve mentioned that the life insurance industry “has been exploring ways to assist while individuals are still living.” A notable new product is the guaranteed universal life policy. Bobby views this policy as an excellent blend of a term-life insurance and long-term care insurance. The premiums are guaranteed for a duration of ten years or more and function like a standard term policy, providing benefits for beneficiaries upon the policyholder’s death. However, it also includes a long-term care rider that offers benefits should the need for care arise while the policy is active. Bobby pointed out that traditional long-term care policy sales have decreased significantly, from 600,000 policies in 2000 to around 150,000 last year, making this new option a viable alternative.
Considerations for You and Your Family
It may be time to assess whether your parents have made arrangements for their long-term care coverage, and it is never too soon to plan for your own needs. If you’re a sole proprietor, you can even deduct a portion of your insurance premiums on your taxes, and keep in mind that insurance payouts are tax-exempt, making it a wise investment. Bobby advises, “First and foremost, ensure that you have a will and power of attorney in place.” The next step is securing appropriate insurance.
Key Statistics
According to the Centers for Medicare and Medicaid Services, approximately 60% of individuals over the age of 65 will require some level of long-term care services during their lives. In the DFW area, costs average around $180 per day, while places like Boston can exceed $400 per day, leading to significant expenses quickly. Let an agent like Bobby assist you in finding ways not to leave this financial burden to your children. Achieve peace of mind so you can embrace and enjoy the vitality you have today.
For further details, reach out to your insurance agent or contact Bobby Davidson at 972.980.4884 for a complimentary 360 Review Consultation.
