Future Planning
How you plan now can determine you and your family's quality of life in the future.
Feb-Mar 2004
A man in his 50s can only work part-time because of his wife's stroke. A middle-aged florist has to shut down her business after a fall. A wife can't provide around-the-clock care for her aging husband, and he has to live in a nursing home. These are all scenarios we've encountered but never expect will happen to us.
In 2003, the average cost of nursing home care in the Chattanooga area was $50,000 per year and care in an assisted living facility was $30,000 to $40,000. Home care averages from $10 to $15 an hour and up. Many costs can be defrayed and your nest egg protected if you make long-term insurance a part of your financial plan. Trend spoke with Gail Lindsey, owner of Lindsey & Associates, to get the information you need to properly plan for the future.
WHY IS LONG-TERM CARE SO IMPORTANT?
Because of advancing technology and modern medicine, people are living longer than ever before, increasing the possibility of needing care later in life. Even so, 40 percent of those receiving long-term care are between the ages of 18 and 64. Traditional health insurance and Medicare are designed to pay for acute, not extended care. Disability insurance may pay for only a fraction of the costs incurred and then typically only until age 65. Without long-term care insurance, your assets may be used to provide care.
HOW CAN SMALL BUSINESS OWNERS INCORPORATE THIS TYPE OF INSURANCE PLAN INTO THEIR FINANCIAL PLAN?
Current legislation allows business owners to deduct 100 percent of insurance premiums, within guidelines, as a business expense for themselves and their spouses. It is permissible to Òcarve outÓ other employees for whom the company wants to pay the insurance or to offer it as a benefit. Also, when benefits are paid by the company, they aren't treated as taxable income to the recipient. Since federal programs do not cover the cost of care, tax incentives encourage all Americans to take responsibility for their long-term care needs.
HOW CAN OFFERING LONG-TERM CARE INSURANCE HELP MY BUSINESS RETAIN QUALIFIED EMPLYEES?
In today's competitive marketplace, attracting and retaining responsible employees is critical to success. Because coverage can be deducted as a business expense, it's a benefit that can be provided at no cost to you. If offered to employees and their families, the coverage is usually available at a discounted group price.
IS IT BETTER TO WAIT LATER IN LIFE TO BUY THIS TYPE OF INSURANCE?
No. A tragic accident can occur unexpectedly, forcing you to provide care out of your own pocket. If you purchase the policy at a younger age, the cost is less, helping guarantee affordability of the policy.
You may pay for a longer period of time, but your overall cost could be less in the long run. Waiting to purchase long-term care insurance could be a big mistake because the cost of coverage increases with age, and a change in health could keep you from obtaining the most desirable rates.
Lindsey & Associates specializes in long-term care planning for businesses and individuals. For free brochures or other information, call (423) 698-1113 or toll-free at (877) 832-4506 or visit the Web site at www.lindseyassociatesltc.com.
