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Investment Planning |
Long-Term Care Insurance
Purchasing a long-term care insurance policy should be considered for most people between the ages of 50 up through their late 60's. It is a good idea to purchase this type of insurance earlier rather than later, to lock in a lower rate and your good health. Long-term care is income protection for the retired. Long-term care will provide a daily benefit to have someone take care of you in a nursing home or at your own home. Keep in mind that this type of insurance won't provide you with any income, but it will preserve your net worth for your spouse if you were to need medical or custodial care. You will want to choose a plan that has compound inflation benefits, meaning that the daily benefit amount increases on a compound basis annually. You can either buy a policy for an amount that covers the cost of your expected care, or buy a policy that does not cover all of your expected fees, and you will then self-fund for the difference. Nursing homes in California could easily cost $150 to $180 per day.
If you are close to retirement and have a long-term disability policy but no long-term care policy, it might make sense to cancel the disability and buy long-term care policy instead. Before canceling any insurance policy, make sure that your new policy is in force.
Tips Disclaimer
These tips contain information that may change over time as a result of new tax legislation. Although we make efforts to keep this information current, you should check with your tax advisor before taking action based upon any information contained in these tips.