Protecting Your Wealth From Your Health

Protecting Your Wealth From Your Health

August 05, 2021

We often hear the question; how do I protect my assets? This can become a very lengthy topic, so we will focus on one subject that we potentially can have some control over. One often overlooked area of financial planning involves “protecting your wealth from your health”.

With so many people living longer and healthier lifestyles nobody wants to envision themselves needing Long-term care. The fact remains that 70% of Americans over 65 will utilize long term care at some point in their lifetime. If you are just starting to plan for retirement or have already pulled the golden parachute it is important that we run an updated cash flow analysis to determine if it makes sense to add this to your plan. Ultimately, we can determine if repositioning a small percentage of your assets to a LTC plan will insulate you from some of the costs in the event of a health event for you or your spouse.

Key Benefits

  1. Peace of mind - knowing that once limited Government benefits have run out you have additional coverage to help offset the cost of care. Keep more of your hard-earned savings in your pocket to meet your retirement goals or pass on as a legacy.
  2. Care Coordination - assistance in finding the facility or nurse you need and putting a plan in place.
  3. Flexibility - receive home care or stay in a facility, maintain your independence longer.
  4. Gain Independence from your dependents - you will have professionals to take care of you not having to rely on family or friends to bath you or take you to the toilet.
  5. Tax Advantage - some costs of the long-term care policy may be tax deductible. Monthly benefits paid out are tax free. This keeps your income taxes lower than the alternative drawing out of your investments.

The costs of LTC have always been an obstacle however in recent years the cost and benefits to these plans have greatly improved raising the question; can you afford not to have LTC? Keep in mind, if this is something that would benefit your family, it is less expensive the younger you are, and your health will determine your insurability. Point being, waiting can prevent you from getting insured. An added benefit to one type of LTC insurance is it not entirely a use it or lose it benefit. If you never need to take advantage of the plan a death benefit will pass on to your heirs and in some cases, you can even access a cash value while you are living, although it will affect the benefits. This can be invaluable in insulating your estate from a health event. Your financial health can be greatly altered when someone has an unexpected illness and recovers only to discover they can no longer afford their lifestyle. Additionally, loved one’s lifestyle or your own care may be affected by a more serious long-term illness like Parkinson’s or Alzheimer’s where the costs last for several years.

Questions to Consider:

  • Who will provide care should you need it?
  • Where would you want to receive care?
  • How will you pay for it?

We believe that knowledge is the best strategy for a well-rounded plan. Reach out to the Monarch Team to see if this strategy would add value to your family.