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Dr. Charles Patterson, WCI Columnist
Congratulations! You have skillfully overcome years of service and endured deployments and relocations in wartime and peacetime.you survived PFASafter that burn pitafter that government shutdown. You have arrived at the promised land of retirement and greener pastures of what comes next. That’s great news. Unfortunately, unlike the immortal acts of heroism that will forever echo in the halls of Valhalla, your mortal body is, well, mortal.
Being mortal in America can be a costly ordeal, especially in recent years. cost estimator Because it is readily available, A rough estimate of their cost know. As with all risks, insurance can be purchased. White Coat Investor covers long-term care insurance (LTCI) on his blog, on the WCI Podcast, and again on his podcast. The CliffsNotes version says: LTC covers services not covered by health insurance and can help defray costs if you have a chronic medical condition or need to move into an assisted living facility.Also, 1) LTC is an aspect of insurance that’s tough, 2) it can be (incredibly) expensive, and 3) those with fewer assets and those with more assets are the least likely to need it. This may be an oversimplification, but it’s not far off. Dr. Jim Dahl once wrote: “The purpose of long-term care insurance is to ensure that all remaining assets do not have to be spent on long-term care, not to keep a spouse or loved one off the streets. It’s for peace of mind.”
Now, do we know someone who probably has a lot of assets, but maybe not a lot, and who happens to be destined to die? Yes, you’re a veteran.
But just because you fit the demographic of people who might benefit from long-term care insurance doesn’t mean you’ll actually benefit. In fact, the cost may only be justified in limited circumstances. The following paragraphs discuss the products available, the problematic prices and risks, and how to approach the question of whether LTCI is a wise choice.
Long-term care insurance options or lack thereof
It seems like a no-brainer to exchange premiums over a period of time in exchange for benefits being paid when you need them. This happens all the time in all areas that involve risk, including automotive, housing, healthcare, and liability. As temples of hard data, risk assessment, and cost analysis, insurance companies needed to make sure this happened. But “should” is the worst word in our language. Despite the evidence Despite claims that LTC coverage has the potential to reduce post-termination costs, issuers have only found (in experience) that policies have been historically undervalued; Many insurance companies canceled plans or went bankrupt. The actual cost of LTC coverage is so high that even public options are either prohibitively expensive or Intolerable.
As Dahle mentioned, there are reputable insurance companies that will be happy to set up insurance for you. Some brokers find them. This is the easy part, as a simple Google search (or even better, a WCI Recommended Insurance Company search) will take you 90% of the way to your destination. However, this assumes that you have fully considered your needs, even if this resource fits into the most logical asset profile.
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military medical insurance
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Federal Retirement Options
Veterans face an interesting calculus. That’s because pensions (plus Social Security and retirement savings) almost automatically disqualify them from the long-term care insurance provided by Medicare. VA benefits may not cover common suites Among LTC benefits, many retirees will find such coverage expensive (ranging from $1,500 to more than $10,000 per year, depending on age of issue), but it also covers end-of-life care. is ultimately a profitable strategy. The extent of your service-connected disability (if any), your funding resources, and most importantly the state of your policies at the time of your need will determine how helpful the Veterans Administration can be.
As a little background, in 2000 Congress Long-term care security law, which directed the Office of Personnel Management (OPM) to contract with insurance companies to provide LTC benefits to participants. According to the current arrangement, the result would be: Federal Long Term Care Insurance Program Orchestration by John Hancock.
The law, as written, requires OPM and the contract administrator to evaluate and maintain the solvent program. As with similar “private” programs, benefits and coverage appear to be more difficult to determine than, say, life insurance. In December 2022, the program will We have stopped accepting new applications. From people who are eligible but uninsured. The suspension is scheduled to last for 24 months, but could be extended, leaving potential buyers on the private market. That is, at this time, there is no federal his LTCI policy that favors retirees. A solution doesn’t seem to be coming soon.
If there is an outcry over this issue, it is not public or vocal. I join them in silent solidarity as I view this LTC situation with considerable ambivalence. Maybe it’s because I don’t plan on using his LTC. Rather than being the beneficiaries of what is left behind, my children’s greatest legacy will be the countless lessons they learned from their father’s master classes on what not to do in life. This is not to say that LTCI is not a valuable service for veterans, but safety in later life seems to be less of an issue. . . At this point.
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moderate income physician
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5 questions to ask to determine the need for long-term care insurance
To further consider whether LTCI could be a valuable pillar of your financial planning, consider the following questions:
#1 What is your end-of-life care plan?
As Eisenhower said, planning is worthless, but planning is everything. Your situation may change and require a different approach, but this prompt is the heart of the matter. Only once you have decided how you want to spend your later years can you calculate the cost. Do you want to stay at home (with assistance) until the end? Does your family want a nursing home? How will surviving a devastating blow to your health and mobility influence this decision?
The basic premise here is that you need to establish a will, or possibly a living trust, if you haven’t already done so. Doctor’s orders for life-sustaining treatment (POLST or similar). Your will was probably already written during your military service (when you were deployed to fight the Taliban in Afghanistan or liberate Kuwait), but it should be reviewed and updated as necessary every two to three years. . These documents and the ideas they contain reflect your values and intentions. LTCI is a tool that can help (or hinder) that execution.
#2 Do you need assets to survive?
If you have no dependents and no need to leave behind any assets, LTCI is probably not for you. The plan then would be to use up the funds until you qualify for Medicare coverage. If you don’t make it to that point, anything left over can be donated to a cause or person of your choice. Or give it to the government as a thank you for your years of service.
On the other hand, if you need to support surviving dependents (wife, children, etc.), there are several options to consider. Although there may be an LTCI role, you may also consider establishing a separate irrevocable trust or ABLE account (for children with special needs). Of course, you can also spend more conservatively in retirement. There’s no one-size-fits-all strategy, and it’s critical to know what income your dependents can rely on (Social Security, Medicare, military pensions, etc.) after you retire. What do you think their best life will be like after you’re gone? This exercise is morbid, but necessary for planning.
#3 How will these change after you retire?
Your retirement years could span 40 years (or more). What will change in the meantime? Everything can and probably will change. However, LTCI insurance is most cost-effective when established early, so creating a comprehensive retirement plan before enrolling can be highly beneficial. If you conclude that you fall into the relatively small group of people who will benefit from her LTCI, you are obliged to start it as soon as possible. You may also consider purchasing insurance two to three years before your planned retirement date. And when you see that you are well prepared as you approach; Right side of retirement smile, the cost of LTCI may not be necessary. Sure, I paid for it for years on end, but it’s a sunk cost for what it’s worth. Although we cannot predict the future, you can cancel your insurance at any time. But in reality, unless he is retiring at age 81, he probably will have time to pay for LTCI costs out-of-pocket if he does careful planning before retirement.
#4 How do your investment priorities factor into your retirement spending plan?
At the end of the day, LTCI, like any insurance, is a financial product that has value for the practical benefits and peace of mind it provides. Unlike many or most other forms of insurance that hedge against disaster, LTCI hedges against a certainty that comes in the form of the unknown (death). Ideally, you should insure yourself if you can. With proper savings and investments throughout their working lives and retirement, long-term care insurance will likely not be necessary for the majority of retired executives and physicians. Therefore, if this question is considered early enough, the need for LTCI may be avoided.
#5 What policies and alternatives fit into your envisioned plan?
As mentioned earlier, the LTCI market has changed dramatically over the past decade.meanwhile some states There are efforts to adopt tax-funded measures to provide this insurance to citizens, but it is not immediately clear whether such programs will continue to be viable. What is clear is that such coverage is necessary for many Americans. The lack of long-term population-level solutions is no reason to buy or not buy insurance. But having a vision and a sustainable plan is a great antidote to the uncertainty that comes with the final stages of life.
LTCI is a product that is suitable for some people. Although difficult and expensive to purchase, it is probably avoidable with good planning and executive income. These conversations are difficult, and the straight roadmap ahead of us often looks crooked by the time we get started. None of this is particularly easy or obvious. But early and careful consideration could be the difference between achieving a fulfilling life and a dignified end.
Have you purchased LTCI? Does it bring you peace of mind? If you disagree with LTCI, why? Comment below!
The views expressed in this article are those of the author and do not necessarily reflect the official views of the Department of Defense or the U.S. government. These works are not authorized, endorsed, or endorsed by any of the parties mentioned above.
