When it comes to thinking about long-term care, people may avoid the risk due to the fact that they don’t understand the potential for needing long-term home care service requirements. They may not want to recognize the risk because they do not understand the potentially exorbitant high cost of health and/or home care. Some people may transfer the risk as part of a carefully researched retirement and financial plan. Each person’s decision-making process is driven by different factors. Here are a number of reasons you should consider minimizing the risk of a long-term care experience through the purchase of long-term care insurance.
To the exclusion of other resources such as insurance, it may be necessary to pay for long-term care expenses from your own financial resources available at the time. This may involve liquidating assets, borrowing from a retirement account, or maybe establishing a loan against life insurance. These options, although monetarily viable, may not be what you visualized when you purchased life insurance or began saving for retirement. Long-term care insurance could be an affordable path to help secure a much greater amount of your retirement plan against an unexpected future care requirement.
If your choice is to retain the risk and fund for yourself solely the potential cost of long-term care, you would then have to set aside a large portion of your assets as an "emergency fund". As part of insuring a portion of this risk, these assets are free to support the quality of life you want for you and your spouse in the retirement years or to be utilized for other purposes, such as charity donations or trusts and/or by gifting to other family members and friends.
Creating Your Own Path
A crucial issue in long-term care is your control of your assets and desires. If you require long-term care services, you may find out that you are not in a situation to control how the funding of those costs are to be administrated. You may object if your family decided to liquidate some assets or sell some prized collection, antiques, or your second home as a way of satisfying these costs. If you were to become very ill, you might not have a say in the matter. By insuring a portion of the risk, you can help to increase the probability that your assets will be administered according to your wishes long before the home care was needed. Another very important element of control is to decide where care will be provided. Long-term care services may be done in any number of locations including a home, an assisted living, independent living residential care facility, or even a nursing facility. Being able to decide where you want to receive care is often tethered to your financial state of affairs at the time of need.
Risk Management Logic
What is a legitimate risk?
A number of people have both homeowners and car insurance, but if you broke a headlight on your car or a hailstone came through your window, you may just choose to pay those expenditures without calling in a claim because the cost is negligible. You already have the insurance, though, because you have decided it’s just a good idea that if something catastrophic happened to your automobile or your home, you would be insured. The requirement for long-term care services could have a much greater effect on your monies than a broken light or a cracked window. Long-term care insurance is very much like your homeowner’s or car insurance - you want to never have to utilize it, but if you need to, you will be happy the protection is there.
Quality of Care
The Correct Caregiver For You
Most people say that the best place to receive quality care is in the protection and comfort of your own home. Occasionally, though, depending on the type of care you must receive, home care may be just as costly as care received in a facility. By insuring yourself for long-term care risk, you can be satisfied that care expenses will be lessened as a concern when the best home care available is sought out and then provided. Having more monies to pay for home care may also make the decision more comfortable between being at home and or having to move to a care facility. If institutional care would better fit your needs, you may have monies available to pay for the facility you want, rather than the only one you can afford.
Buying Time For Important Decisions
Life insurance helps to provide a window of time for your family members in financial decision-making processes. This window of time aids in ensuring that they do not have to liquidate funds immediately to pay for estate or probate expenditures under less than advantageous circumstances. Long-term care insurance can aid in a like manner. Funds may not be required to be liquidated in order to pay for long-term care costs—or you may have time through the home care coverage time to think about where, how, when, and what you might consider liquidating.
Decisions that are Stressful
An unplanned for need for long-term care services may create stressful situations for family members having to deal with issues of care giving. Care giving may make a physiological and physical burden on family members who may have to aid with all personal care requirements of a parent or loved one. It may also have a monetary impact on family "caregivers" who have to take time from their employment, adjust from full-time to part-time work, or even have to vacate their job permanently in order to provide the care needed. Care giving may also have an emotional impact on heirs and family members having to take care of their parents— people who they have always sensed, in the past, were strong and in control. Physical and mental debilitation can sometimes bring an unpredicted role-reversal to the child-parent relationship. Long-term care insurance helps with a number of considerations by spelling out resources and benefits to aid you and your family to all understand the choices and select the best avenue of care. Long-term care insurance provides many advantages that you and your family may not know about. A financial long-term services professional can help in this regard.
Consider long-term care insurance for peace of mind now and in the future.