Haims: Consider long-term care insurance in your retirement planning (column)
February 26, 2018
Dealing with a situation where you or a loved one becomes unable to complete daily tasks that were once considered mundane and commonplace can be difficult. It's going to happen, though: At some point, we all will slow down or encounter an ailment that is going to undermine our ability to live autonomously. Odds are, most people will need help with daily activities such as driving, preparing meals, bathing and living a quality life. Will you be prepared for such times?
When medical challenges occur that incapacitate someone for a week, month or even a year or more, a long-term care insurance plan or a self-insured plan may be needed.
I don't want to disillusion anyone: Mentally and financially preparing for a time when tending to daily life tasks becomes challenging is not something most of us do or even conceptualize. Saving for a house, general bills, a trip or college take a front seat. It takes great discipline to prepare for a time that is hopefully very far in the future.
Financial planners may be the best people to speak with to discuss the pros and cons of a long-term care insurance plan or a self-insurance plan. The concept behind self-insured planning is that, over your lifetime, you have had the ability to invest your money well enough to provide the funds needed to pay for your long-term needs.
On the other hand, long-term care insurance requires that you have enough income to support the monthly or annual premiums. Regardless of the method of insurance you choose, my advice is to make a plan for long-term needs. Odds are, you are going to need some help in your later years.
Whatever your plans, long-term care insurance might be a viable option. As health awareness increases and medical care improves, we can expect to live longer than any generation before us. Illnesses and injury can be prevented, but the odds are we'll still need assistance with the activities of daily living. Long-term care insurance can be the means to provide the necessary support.
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• Long-term care insurance can provide coverage in the home or in an alternative facility.
• Long-term care insurance gives you a choice of provider. You're not limited to certain government-approved facilities.
• Long-term care insurance can provide a benefit for life so you won't run out of coverage. Depending upon the daily benefit amount you anticipate you may want, a policy for you and your spouse could cost somewhere in the range of $2,500 to $3,500 a year if you are older than 55.
• Long-term care insurance is available with certain life insurance and annuity products. If you ever need care, then you can use the money you've invested or pass it to your heirs. This is a newer type of insurance product and may be a good option for many in their 40s and 50s.
• Long-term care insurance offers several tax advantages. Premiums are considered a medical expense on individual income tax returns. Qualified long-term care insurance benefits are tax-free.
Nursing homes, assisted-living centers and home care are expensive and can quickly deplete your savings. Buying a long-term care insurance policy can be a way of assuring your future needs are met in a manner of your choosing.
Long-term care insurance is one vehicle, but like most financial products, it needs to be understood before you can make an intelligent decision for your unique situation. According to the American Association for Long-Term Care Insurance's 2018 Price Index analysis, the costs for virtually identical policy coverage vary significantly from one insurer to the next. So, shop around.
Judson Haims is the owner of Visiting Angels Home Care in Eagle County. Contact him at 970-328-5526 or visit http://www.visitingangels.com/comtns.