Submitted by Jordan Mahoney, Financial Advisor with Waddell & Reed, Inc.
Why be concerned about long-term care now? Long-term care affects more than the elderly, as some younger people require it as a result of accidents, strokes or chronic illnesses. Medicare does not cover most long-term care expenses, which can add up significantly, and Medicaid is usually an option only for those with lower income.
Financial Advisor Jordan Mahoney helps people plan for the uncertain with long-term care plans that fit their budget.
So how does one prepare now for an uncertain future? Developing a “long-term care action plan” can potentially help you maintain control of your lifestyle, preserve your savings, minimize family conflicts and ensure that your expectations for receiving high-quality care are met.
Most financial planning experts agree that your action plan should include a written document that clearly outlines your wishes and provides answers to the following questions:
• Who will provide the different types of long-term care?
• Where will the care take place?
• If the need for long-term care increases, who will provide it?
• Is it important to me that I stay at home as long as possible?
• How will the care be paid for?
Long-term care insurance policies themselves, while seemingly complex, are conceptually quite simple. You pay an annual premium to an insurance company, which then agrees to pay the costs (usually at a daily rate) of a long-term care provider or facility. Cost of coverage varies, depending on the features of the policy and other factors, such as age. Generally, the premium will be lower if purchased at a younger age (such as 60, rather than 70 or 80). Most policies cover a variety of options, including home health service, adult day-care workers, assisted living facilities and nursing homes. Future payments from a long-term care policy are contingent on the claims-paying ability of the insurance company that issued the contract.
Just as we prepare for retirement with employee retirement plans and IRAs, as well as for the financial stability and health of our loved ones with life and health insurance, we can use long-term care insurance to help prepare for another of life’s possible eventualities.
Call your Waddell & Reed financial advisor to discuss whether long-term care planning should be part of your overall financial plan. (Please note that long-term care insurance is offered by Waddell & Reed financial advisors through arrangements with insurance companies.)
This article is meant to be general in nature and should not be construed as investment or financial advice related to your personal situation. Please consult your financial advisor prior to making financial decisions. Investing involves risk and the potential to lose principal.
Jordan Mahoney is a Financial Advisor with Waddell & Reed and is licensed to offer securities and insurance in Washington state. She can be reached at 360-734-4728 ext.: 123. Securities are offered through Waddell & Reed, Inc., Member FINRA and SIPC. Insurance products are offered through insurance companies with which Waddell & Reed has sales arrangements. (06/14)
