Will your ‘Golden Years’ be Golden?
In my opinion there are two major financial issues that we face in the ‘Golden Years’.
The first is having enough liquid cash to cover all the final expenses. These may include final medical expenses, taxes, legal and accounting fees, plus associated costs and can easily reach $250,000 or more.
The second is the cost of Long Term Care. As we continue to live longer we may need in-home care, assisted living, or nursing home care. These type of costs can exceed $10,000 per month.
These expenses can be devastating for our families. Until now there were really only four options to help solve these problems. They were 1) to set aside significant cash reserves; 2) buy a life insurance policy; 3) purchase a long term care insurance policy; or 4) rely on family assistance.
Fortunately the insurance industry has developed a nice solution for many people. It’s a hybrid policy of Life and Long Term Care commonly called a COMBO policy.
Here is how it works:
Here is an EXAMPLE of how it works:
You have a $500,000 Combo Life & Long Term Care policy that has a 2% option. You have a stroke, require care and start taking $10,000 per month from the policy for Long Term Care expenses.
A year later you pass away. The $120,000 that was used for Long Term Care expenses will be deducted from the $500,000 policy. This would leave a $380,000 death benefit to your beneficiaries.
Remember: There is a guaranteed death benefit. In this example, even if you used all of the $500,000 policy on Long Term Care there would be a minimum death benefit paid to your beneficiaries of $50,000.
The major advantages are:
The basic concept is quite easy. It becomes complicated though as there are a multitude of options and policies to consider.
Here are some of the features to look for when considering a COMBO of Life and Long-term Care coverage:
The life insurance portion is fairly easy to design but the Long-term Care area is very complicated and requires the assistance of a professional with experience not only in the insurance industry but also who has personal experience in understanding the needs of the people in their “Golden years”.
Malachy Whalen & Co., Inc. has been the ACMS endorsed life insurance agent since 1968 and we know the needs and the markets.
We sincerely invite you to email Malachy Whalen at email@example.com or call him at 412-281-4050 for a FREE personal consultation.