Preparing for the Long Term

Do you ever think about suddenly becoming incapacitated and not being able to provide income for you and your family? It’s something most of us don’t want to think about.

I get it. While death is inevitable, and many people purchase life insurance to protect their families when that inevitability occurs, only 9% of Americans own long-term disability insurance. Most of us are obviously willing to gamble that we won’t need long-term care, yet 25% of workers become disabled before they retire. That’s a bit like playing Russian roulette with a gun that only has four chambers in its cylinder.

Most of us are taking quite a gamble, even though long-term care could be financially worse than death with no money coming in and lots of it going out.

The government may provide some assistance with Medicare, Medicaid and VA benefits. But those programs are not adequate and, in the case of Medicaid, may vary from state to state. The fact is, everyone should consider some option for long-term disability.

The first option is to insure with a traditional long-term care insurance policy, where you choose the amount of coverage, the amount of time it lasts and how long you wait to begin receiving benefits.

Or, you might choose a hybrid policy, which offers life insurance and long-term care. This type of policy will pay for long-term care during your lifetime if you need it. If you don’t need it, it will pay a life insurance death benefit to your beneficiary.

If you have already acquired significant assets, you may want to consider a hybrid policy that provides long-term care if you need it, income tax-free life insurance benefits for your heirs if you don’t need it, and a money back guarantee if you change your mind. The contract is usually funded with a one-time payment, with no ongoing premiums.

Another option is to depend on your savings and stock portfolio to see you through a disability. The advantage of this strategy is it gives you the greatest flexibility of how you use your money. The disadvantages are you will be depleting your retirement account, and no one knows when a long-term disability will occur. If it happens later in life, you may have enough to see you comfortably into retirement. If it happens next month, your assets may not be great enough.

Let’s get together to discuss your long-term disability options and how you can best protect yourself. Simply click the “schedule a consultation” button below so we can meet.

This blog was written my Erica Moyer.

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