Today’s question is particularly fitting for Long-Term Care Awareness Month: what are my options for long-term care coverage? Heath Grossman, CFP® joins this week’s Money Wisdom Question Series to discuss the importance of securing long-term care coverage and what options are available.

Protecting Your Assets

Whether to get long-term care insurance is certainly not an easy conversation to have. There is a lot to consider, including your intentions for getting coverage. We believe you should frame this decision in regard to protecting and persevering your assets – basically as a way to prevent a long-term care event from draining all that you’ve accumulated.

Consider protecting your assets for your spouse who is still at home or preserving them to eventually pass on to your beneficiaries, such as your children or other individuals or organizations you care about. Keep in mind that the longer you wait to decide about coverage, the fewer options there will be.

Traditional Long-Term Care Insurance

A traditional long-term care insurance policy is an option that’s been around for years. You can think of this type of insurance like your car insurance. You pay a premium and your policy is there in case you get into an accident. But if you never use it, you lose it. In that same regard, if you don’t ever need long-term care, whether it be home care or nursing home care, those premiums you paid are gone.

Hybrid Life-Long-Term Care Policy

On the flipside, a new type of policy has evolved over the years which we like to call life insurance, long-term care hybrid plans. These policies also provide coverage for long-term care, but if you don’t end up needing it, some or most of that money will be returned to your beneficiaries after you pass away.

Self-Insurance

A third option is to take the money that you would have put toward an insurance policy and earmark it for potential long-term care costs. If you’ve been a good saver, you can invest and grow that money until you need it. Plus, if you don’t end up using it, it’s there for you to pass down to your heirs.

Consult with a Financial Advisor

It’s essential to prepare for the possibility of long-term care whether you’ll eventually need it or not. Without a planning strategy, you can put the assets that you’ve accumulated, along with the financial security of your spouse or family, at risk.

As you weigh your options, we encourage you to have a conversation with a financial advisor. At Johnson Brunetti, we can assess which route of coverage aligns realistically with your family situation and personal finances so you can make an informed decision that’s right for you.