If you wonder why a financial advisor would ask you about a specific kind of insurance, remember that medical care, which can be a major expense and at age, can become even more costly as a person gets older. People are living longer these days, but getting older could mean that you are no longer in the best of health and may need continuous medical care. Even if you have carefully saved for retirement, it is possible for health care costs to deplete your retirement funds at a time when you are not able to go out and earn more.
Long-term care policies have evolved and they are certainly not one-size-fits-all. Kiplinger examined some “New Ways to Pay for Long-Term Care” and found alternatives, “if you don’t want to buy — or can’t qualify for — standalone long-term-care insurance.” These alternatives are: policies that combine life insurance with long-term care insurance, policies that combine a deferred annuity with long-term care insurance, and longevity insurance (a “type of annuity pays out only when you reach a certain age — usually 85”).
And if you doubt that you will need long-term care, Forbes has some statistics for you to consider:
- “87 percent of people under the age of 65 mistakenly believe their private health insurance will cover the cost of long-term care.”
- “Medicare will only pay for 100 days of skilled nursing care. Thereafter, the insured is responsible for 100 percent of the cost.”
- “The annual cost of assisted living care in most states ranges from $30,000 to $50,000. “
A Fee-Only financial planner can help you decide on a long-term care policy that will be beneficial to you and since Fee-Only financial planners do not get a commission for recommending certain products, you can trust that you will receive impartial advice.