Every week the economic news seems to get worse. Dire warnings are now coming from almost every corner of the financial markets. Some people are talking about the stock market shedding half its value in the next year or two. All of that could very well be realistic, but does that mean now is the time to hold back on certain insurance policies? One of the most notable that too many people in their 40s or 50s overlook is their long-term care insurance policy. They overlook it because they either don’t think it’s necessary at that stage in their life or they don’t want to invest in it.
While the financial situation in this country has seemed to be excellent for the past decade or more, since the recovery from the Great Recession, the truth is much different. It has been a bubble, just like the dot-com bubble or the housing market bubble that led to the Great Recession. It is going to burst.
There have been many controlling factors to the bubble, most of them politically motivated, regardless of which side of the political aisle you sit on. It’s all been to push or kick the can down the road. Now, the bill is coming due sooner or later.
But does that mean long-term care insurance is something to avoid? Absolutely not.
Why consider long-term care insurance now?
Whether we slip into a recession, a depression or something in between really is irrelevant for anyone who has saved for retirement. It is absolutely true that some pensions could be obliterated in the next couple of years, with retirees being forced to accept half of what they were promised or even less.
401(k)s could be annihilated. They could lose half or three-quarters of their value in a matter of months. Yet long-term care insurance is something to consider and hold onto during the storm.
First, the older you get, the more likely you may need long-term care.
Your primary health insurance coverage isn’t going to pay for it. Neither will Medicaid unless it’s nursing home care (in most states) and you have used up all of your available assets and savings, which could very well be the value you have in a retirement account.
Second, if you lose retirement value, long-term care expenses can hurt even more.
You may not realize it but in-home care, full-time, could cost you, on average, $45,000 a year. A nursing home could cost you $85,000 to $300,000 a year, or more. Those expenses will impact you more, especially if your retirement accounts take a hit during this next economic downturn.
Finally, the sooner you begin a policy, the more affordable it can be.
That may not always be the case, but in a general sense, if you are in your early to late 50s, this is the perfect time to start because the policy will be the most affordable at this stage in your life.
Begin the long-term care insurance policy, hold onto it, and regardless of the storms that come, you will know that you and your spouse or another legal dependent will be protected in the event one or both of you require long-term care in the future.