Planning for tomorrow can be difficult. Getting older is no cakewalk either! If there is one thing that is true for every living person on this planet, it is that every one of us will get older and eventually die. No one (yet) has figured out a way around this fact of life.
One of three paths lies ahead for all of us: Live a long healthy life, die too soon, or get sick along the way. The dream of living out our “golden years” in a state of contentment and happiness is only true for part of the population. Disease, disability, and dementia are real possibilities. Planning for uncertainty is critical for everyone.
Americans are living longer. As more and more of us continue to have personal experiences with loved ones needing care, or actually becoming a relative’s caregiver, the need to have a plan for long-term health care is becoming increasingly apparent.
We downplay the risk of needing care. A lot of momentum is being given to research, medication, and anti-aging therapies, all of which will most certainly extend average life spans across the globe. The belief that you will be the exception is just one way that Americans fool themselves and procrastinate on creating any type of plan. (A 2020 Gallup poll found that less than 50% of Americans have a will!)
Three-quarters of Americans believe that “living a healthy lifestyle is the answer”—but living healthfully may simply increase longevity.
With longevity comes the perils of aging—and the staggering costs of health care—when we can’t do the things we used to do.
More than half of Americans say that “having a spouse provide for their care is their plan,” yet very few spouses signed up to change diapers, nor could most adequately care for an aging or sick spouse, especially given their own possible health concerns. That burden then falls upon the children—61% of whom say they “don’t want to be someone’s caregiver.”
The likelihood of depleting assets, or consuming assets intended for a spouse or legacy, is strong, given that 2 out of 3 Americans will need some type of long-term health care for at least 90 days during their later years.
What’s your plan?
The insurance industry has figured out a really great solution. It’s called asset-based long-term care. It’s like a bank CD, except this plan leverages up for health care. (Think of ”moving money from one pocket to the other,” with the second pocket guaranteeing you can always return the money to the original pocket—but the dollars placed in pocket B are bigger than pocket A.)
Here’s how it works: Position a lump sum in a specialty insurance contract. If your circumstances change, you get your money back. If you never use care, you get a tax-free death benefit. But, if you do need care, your own money gets leveraged up in value by 4 to 8 times (depending on age). This strategy guarantees that, no matter what, you never lose. And you don’t have to buy anything.
Have the conversation with the people you love and make sure you have a plan for longevity and preserving your assets—and paying for health care. After all, it’s your life.
Martin Levy, CLU/RHU, is founder of CorpStrat/Corporate Strategies Inc., located in Woodland Hills, CA. A 30-year insurance industry veteran and Lifetime Member of the Million Dollar Round Table, Levy is an expert in long-term care planning strategies. You can reach him at (818) 468-0862 or [email protected].