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Long Term Health Care Must Be Part Of Any Truly Comprehensive Financial Strategy.
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LTC needs pose a very serious risk to both your quality of life and to your financial future.
Unfortunately... long term care is not even considered... in far too many financial planning efforts.
Failure to consider that you may someday require long term health care means that you are... by default... assuming that you are and will remain healthy.
To hold such a presumption is nothing more than... a denial of the realities of life.
In the same sense that you structure your financial plan... to include
life insurance
in order to address the possibility that you might die tomorrow... and thus leave your
loved ones without enough cash flow to provide them a safe and secure future.
And in the same sense that you structure your financial plan... to include disability insurance in order to address the possibility that you might become disabled tomorrow... and thus lose the cash flow that you need for yourself and your family.
So too must you presume that... you may live a long life.
And, if so... you will at some point in time... require long term health care services of some sort.
Failure to plan for this possibility... can quickly consume a lifetime of savings and assets... and leave you old, poor, and at the mercy of government programs.
I can assure you that...
Depending on the government is definitely not where you want to end up... late in life.
Hence... it is absolutely crucial to create a strategy... to provide yourself and your spouse with the level of long term health care you may need and/or prefer.
And so... this is the reason that...
Long term health care must be part of any truly
comprehensive financial strategy.
What is Long Term Health Care?
Long term care is the everyday assistance needed to help people who have difficulty performing ordinary activities of daily living (ADL's).
When a person has trouble with simple functions such as bathing, dressing, or eating, he or she may need special assistance.
Or... if a person suffers from some type of cognitive impairment such as Alzheimers disease they may need extra attention or supervision.
When the American Council of Life Insurers surveyed consumers about Long Term Health Care costs, they found that:
- 50% of consumers have given little or no thought to the issue.
- 40% said they had never even heard of it.
- 6% said they had taken "some" action on it.
- Only 4% said they had actually solved the problem.
| I have never been in a situation where having money made it worse. ~ Clinton Jones |
Long term care services are expensive.
The average one year cost in a nursing home is about $75,000 and can be much higher in some parts of the country.
Though less expensive... home care is still costly.
A visit by a home health aide to help with bathing, dressing, and household chores can cost $2,700 per month.
More skilled help... for physical therapy for example... costs even more.
It is very clear that long term health care has great potential... to ruin your financial plan.
The truth of the matter is that you are probably more likely to face this risk than you realize.
Marriott Corporation discovered that though the average age of their thousands of employees is only 35... 15% already have elder care responsibilities.
If you are thinking that you can just have a family member take care of you... consider the following.
A survey of caregivers by The National Center for Women and Aging found that...
- 16% quit their jobs to care for a relative.
- 13% retired early.
- 22% took unpaid leave.
- 20% cut work to a part time schedule.
- 64% used vacation or sick leave to provide care to a family member.
- 67% left work during the day to provide care.
- 69% arrived at work late or left work early.
- 29% gave up a promotion.
- 25% refused a job transfer.
How would you feel about causing a friend or family member to make such sacrifices on your behalf?
It even gets worse.
According to the Journal of the American Medical Association... 40% of care giving spouses suffer from depression.
Other studies have found that... compared to others their age, those who begin to provide care for their husband or wife are 63% more likely to die within four years.
Long term health care is a cruel destroyer of lives and financial plans.
It is true that some have ignored LTC because... they have not envisioned their future... filled with health care problems.
Still others have assumed that in the event that they needed LTC... that someone else would pay for it.
A recent study has showed that...
- 34% of those surveyed think their health insurance will pay for long term care expenses.
- 30% think Medicare will cover the costs.
- 14% think Social Security will pay.
Unfortunately... none of the above is true.
What will pay, however... is Medicaid... the federal health insurance plan for the truly poor.
To qualify you must have little or no money. The level of care provided in some Medicaid facilities is a real concern.
And... just the prospect of relying on the government to determine the level of care you will receive... is problematic to say the least.
So it comes down to this question...
Self funding is normally only a viable option... for wealthy people.
Most folks just can't shoulder such costs for very long.
So what is the answer?
For most... the solution is to own a Long Term Care Insurance policy.
Not only should you own it... but you should not delay in getting it. The younger you are the cheaper it is.
If you are in your late 40s or early 50s (or older)... buy long term care insurance NOW.
It will never be any cheaper and you will never be healthier and more likely to qualify for coverage.
Finally... if you have the... "It won't happen to me" mentality.
According to ACLI...
- By 2030, the over 65 population will double.
- By 2030, the over 85 population will be the fastest growing segment of our population.
- By 2030, half of all women who reach 65 will reach 85 and half of all men will live to 82.
- Those age 65 who will require LTC at some point:
women 1 in 2, men 1 in 3 - The nursing home population will double, to more than 5 million residents, over the next 20 years.
Long-term care insurance can cover the costs of those services and protect lifetime savings.
I strongly recommend that you take the time to go to the following two resource sites for additional information about the challenges of long term health care, your options, policy features, how to compare policies, etc.
The National Clearinghouse for Long Term Care Information.
Be sure and download the "Own Your Future Planning Kit".
It is full of really valuable information.
The American Council Of Life Insurers - Long Term Care Insurance.
Be sure and download the "ACLI Consumer Brochure".
This guide answers commonly asked questions about long-term care insurance and provides a checklist for selecting a policy.
Long term health care poses a very serious risk to both your quality of life and to your financial welfare.
Long term care is a cruel destroyer of lives and financial plans.
It therefore... must be planned for... well in advance.
Long term health care must be part of any truly comprehensive financial strategy.
"Because It Matters"... Jim
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