What’s the most effective way to pay for professional long term services and support?

 

Quick answer – buy what I like to call long term health insurance.

Why? Owning this special kind of financial protection is much better than “just paying” for this help yourself and quickly using up most of your savings nest egg. 

How much protection to buy?  We are able to buy a certain amount of homeowners insurance because we know the value of our home. With long term services and support we do not know how much help might be needed or for how long they will be used. Here are some points to think about:

  • Cost sharing is a way to have more protection at a lower cost. Look at what amount of help you could pay from say social security or income from investments and what amount would you want your Long Term Care insurance plan to pay.
  • These special services are forecast to double in cost over 12 to 15 years. To protect against this it is important to have a plan with inflation protection. Even though this option is expensive it must be considered.
  • We are living longer, which in many ways is great. Longevity however raises the probability we will have a change in health or develop frailties later in life. This in turn increases the need to protect your financial nest egg.
  • One idea for funds to pay your plan’s premium is to use some dollars from income and some from the interest you earn on financial investments.
  • Paying for your plan on an annual basis may be 8% lower than monthly.
  • The premium for this important insurance is lower than the cost vs risk of our homeowner’s coverage and the other kinds of insurance we have!  This is just one of the many reasons to buy this special kind of financial protection.

Questions – contact John C Parker, RHU, LTCP