Planning for long-term care can make a world of difference
by Alicia Wanek | Writer
You’ve probably heard people say recently that “50 is the new 40.” We look younger, eat better, and live longer than our parents’ generation. However, if we’re living longer but still want to retire at age 65, our money may have to last a LONG time, and the likelihood for the need for some type of long-term assisted living or nursing home care increases with life expectancy. What’s the best way to plan for the financial burden of those senior years?
Consider this real-life scenario: An older couple raises five boys who are now successfully raising families of their own. The couple lives in the same home they had been in for decades when the husband falls ill and passes away after a short illness. The sons begin to notice a decline in their mother’s mental state and make the decision to help her to move to an assisted living facility. Thanks to their father’s purchase of a long-term care policy many years before to cover the $7500/month for her care, the savings to those sons and their families was approximately $350,000 before her death.
A recent conversation with Bobby Davidson, local independent insurance agent, and Steve Davis of Insurance Designer, one of the largest insurance wholesalers, highlighted some of the new trends in long-term care options. In their combined 50+ years in the insurance business, they’ve seen the benefits for families when good planning has eased the burdens to clients and their loved ones.
Steve says the life insurance industry “has been looking for ways to help while you’re still alive.” One of the newest concepts is a guaranteed universal life policy. Bobby believes this is a fantastic hybrid of a term-life policy and a long-term care policy. The rates are guaranteed for ten years or more and operate like any other term policy with benefits for loved ones if the policy holder dies. BUT it also offers a long-term care rider offering care benefits if you need them while the policy is in place. According to Bobby, traditional long-term care policy sales have decreased from 600,000 policies sold in 2000 to about 150,000 last year. This new concept offers an alternative.
It may be time to see if your parents have plans for coverage of their long-term care needs, and it’s never too early to be planning for your own. If you are a sole proprietor, you can even write off a portion of your premium, and remember insurance is tax-free, so it’s always a good investment. Bobby says, “Remember, the first priorities are to have a will and power of attorney.” Insurance is the next step.
According to the Centers for Medicare and Medicaid Services, about 60 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. With rates in DFW averaging $180/day and over $400/day in places like Boston, it can add up quickly. Let an agent like Bobby help you to figure out how NOT to leave that cost to your children. Give yourself that peace of mind so you can enjoy how good you look and feel right now.
For more information, contact your insurance agent or contact Bobby Davidson at 972.980.4884 for a complimentary 360 Review Consultation.