Long Term Care Planning
When we ask Clients if they’ve done Long-Term Care planning, we often see a glazed look come over their faces as they consider the likelihood of their own future frailty (and/or) the possibility of needing care.
Unless they have watched their parents or someone they know to move through a long-term care event, people minimize their personal risk for needing Long-Term Care planning.
Common misconceptions we hear:
- “I do not need to plan for a care event. It won’t happen to me.”
- “If I need long-term care, I’ll just kill myself.”
- “I’ll self-insure.”
- “My wife will take care of me.”
- “Isn’t that what Medicare is for?”
- “Why should I waste money on an insurance product I may never need?"
- “This has nothing to do with asset management, capital preservation, and/or retirement planning."
Nothing could be farther from the truth. We know it’s uncomfortable to think about, but we’ve watched the alternative play out in people’s financial lives.
Unfortunately, this perspective largely misses the point. The challenges of an unforeseen care event are not born by the person who needs care; he or she will be cared for one way or another. Instead, it is the spouse and family who are at risk. The individual may be right… he or she may never need care. But if care is needed, what are the consequences for the spouse/partner, primary caregiver, and family?
As Advisors, we’ve had a front-row seat to the financial impact of care events.
- We’ve observed significant financial, emotional, relational, and physical impact.
- The goal of planning is to shift the focus to the individual who is more likely at risk financially if Long- Term Care services are needed.
- The spouse/partner (or) adult children carry the burden of supporting the individual needing care and may be drained of financial resources.
The lifestyle needs of the non-frail partner (survivor) should be the goal when designing an appropriate level of Long-Term Care Insurance coverage. The coverage should protect enough income producing assets to support a survivor.
We include a Long Term Care module in all our Financial Plans so that this isn’t a decision you make based on emotions or speculation.
As with everything, we want to know what’s important to you, and what you stand for. Maybe you’re the person who wants to die with one nickel left in your bank account—or maybe you’re the person who wants to outlive their assets.
As holistic financial advisors, we cannot serve you to the best of our ability without helping you consider that ONE health event could financially unravel everything you spent your entire life building!