Maybe you’ve heard the phrase ‘three legged stool’ during your last financial planning session with your broker or insurance agent.
Each leg of the stool represents varying sources of income that will provide for you in retirement: social security, pensions and your retirement accounts, such as the 401K, IRA and Roth accounts.
It’s crucial to identifying the health of those three areas, to make sure they’ll serve you well in the Golden Years.
But another leg for consideration should include long-term care insurance (LTCI). The policy will be there for you if you need nursing home care or in-home assistance.
What’s more, the payout from the policy should help reduce the amounts you need to draw down from your personal accounts—those other than social security and pensions.
Let’s say the monthly bill at the nursing home is running $6,000 per month; your receiving $1,500 monthly from social security; maybe another $1,000 from a pension and you portfolio is kicking out about $2,000 a month.
But your revenue stream is short about $1,500 a month. How will you make up that gap to pay for the nursing home?
You’re in luck, because the payout from your particular policy totals $1,500 a month.
It’s time to thank your insurance agent or financial planner for urging you twenty years ago to buy it—remember, to buy LTCI when you’re young to lock in lower premiums.
Coverage in you home or assisted living?
That’s the nice thing about LTCI coverage: you have some flexibility. For example, you may not have to go to a nursing home. You might be able to receive limited care right in your own home.
Let’s say, you can do most of your daily tasks, but aren’t able to cook your meals. Generally, the policies can cover the costs for home health assistance.
LTCI is a sure way to help protect you from spending-down your portfolio in times of such a health crisis.
The above mentioned article has been written by keeping our friends from USA (United States of America) in mind, I hope this article would be of some help to them. Please do share your reviews on same and soon I would be adding more of such articles for our friends residing in Indian or US or other subcontinents (requires research before writing). I would also request you to please do the necessary research before planning financially or buying any financial product