David HaynesDavid Haynes, CLTC, is an independent insurance broker specializing in long-term care insurance planning. Contact David at 336-314-1698 or david@haynesltc.com.
“Long term care” – Three words that can change a family forever. Long term care is not a place. It’s an event that can happen to anyone, anytime, and anywhere. Long term care is assistance provided to loved ones because of their inability to perform activities of daily living due to an illness, injury, or progressive, sudden, cognitive impairment such as dementia or Alzheimer’s. Many assume that long-term care is for those in nursing homes/skilled facilities reserved for the elderly. That is only part of what most people see. “Over 80% of those age 65+ will need some type of care during their lifetime.” Caregiving in the US; National Alliance for Caregiving, AARP, 2021.
Most statistics confirm that care typically begins in the home, unnoticed by many people well before a facility entrance. Lives are impacted and dollars spent before the larger financial obligations take place. The impact of burden on the family members providing the care can be overwhelming. We all wish to live a long, happy and healthy life in our retirement years. Most people do not think of the complications associated with a short or a long term care event should it occur. A long term care event changes everything!
Part of the financial planning process is understanding the impact that care may have on your investments, assets, your family and the future. A long term care event can have catastrophic financial consequences on a retirement plan. Most funds that pay for care come from “Cash” or “Long Term Care insurance policies”. Some may wish to “self insure” financially to pay for future care. While a few may have the financial resources to pay, most people do not. Don’t underestimate the cost of care. A small premium helps to transfer the financial risk to the insurance company versus your retirement dollars. Remember, the insurance dollars help your family manage the care, instead of providing it.
A major risk is the uncertainty of the length of the long term care event–a few months to many years. Most people will require professional facility care outside of the home and that comes at an expensive cost over time.
The best time to obtain a long term care policy is when you are young and healthy. You can’t purchase it when you need it. A properly designed policy can have many valuable features that compound over time. Unfortunately, many buyers are declined by waiting too late to apply. I always say that a doctors visit can change everything. Many insurance carriers provide premium discounts to “couples”. The IRS has favorable tax deductions on the premiums in certain cases, especially the self employed and business owners. Design flexibility on creating your own policy is very flexible.
Your family members want to hear, “I Love you!” “What do you want to tell them?” Also, “What do you want me to tell them if they call me?”
“When you think of long term care … Don’t Hope for the Best, Plan for it!”