There’s a common phrase we’ve all heard: hope for the best, plan for the worst. When it comes to our health, finances, and insurance, this saying especially rings true. We don’t like to think something bad will happen, but there’s always the chance that it will.
I recently met with a client whose wife experienced a stroke. Unexpected events like these are upsetting enough without having also to worry about the financial implications. Working with this individual reminded me just how important it is for everyone to understand long-term care and what someone should do if their spouse or loved one requires this form of assistance.
Whether or not you’ve recently experienced such an event, it’s important to plan ahead and know what steps to take should something happen to your loved one.
1. Meet with Your Financial Advisor
Your financial advisor is integral to the circle of professionals who can guide you through the process. Beyond your doctors and, if needed, your attorney, your advisor can help you address the financial and insurance elements involved and help you understand long-term care.
One of the first people you should call is your advisor. Hopefully, you’re working with someone who you feel comfortable with calling and sharing these personal details. If not, search for a different advisor with whom you can build a close bond.
2. Review Your Insurance
Either on your own or with your advisor, review your insurance policies, including your health insurance or Medicare and, if you have it, long-term care insurance. Depending on your policy, your health insurance or Medicare may cover a majority or all of your loved one’s hospital and medical needs.
Even if these needs are covered, in almost all cases, neither health insurance nor Medicare covers long-term care. This is where your long-term care insurance policy comes in hand. If you don’t have a policy, you’ll have to consider your out-of-pocket options.
3. Identify Your Care Options
If you have long-term care insurance, review it for any requirements. Some insurance companies require you to use services from a certified home care agency or licensed professional, while others allow you to hire family members or non-licensed providers. Your policy level will also determine what type of facilities, programs, or services you can receive.
If you don’t have insurance, you’ll need to determine your long-term care costs. On average, it costs $205 per day or $6,235 per month for a semi-private room in a nursing home, or $229 per day or $6,965 per month for a private room. If you determine a nursing home may not be a good option financially, consider looking for a family member who can assist.
4. Create a Short and Long-Term Plan for Your Family
A loved one requiring long-term care or extended medical assistance has a significant impact on your family, both in the immediate and in the long run. After determining how you will cover long-term care, you’ll need to create a plan for your family.
In the short-term (between now and one year in the future), how will this affect your family’s daily life? Will one of your family members be caring for your loved one? You may need to change vacation plans or adjust who picks up the kids from school.
In the long-term, what will your spouse need? Do doctors anticipate an increased or reduced level of care years down the road? Does it make sense to move closer to a better or less expensive nursing home? These are just a few of the details you’ll need to address so you know what to expect.
5. Adjust Your Financial Plan
Once you’ve determined your short and long-term family plan, you may need to make adjustments to your financial plan, including your budget, retirement plans, and living situation. Does it make sense to downsize to afford better care? Will your loved one’s long-term care needs impact your anticipated retirement date or lifestyle?
Your financial advisor can help you evaluate any changes that must be made to your financial plans or investments and create new strategies if needed.
Do You Need Long-Term Care Insurance?
Whether you’re worried about potential health concerns or want to protect your hard-earned wealth, it’s important to understand the long-term care insurance options available to you and whether or not a policy makes sense for your lifestyle and needs. While some policies can be expensive, requiring long-term care without insurance in place can be devastating.
It doesn’t hurt to get a quote for long-term care insurance and to review the policies available to you. To learn more about long-term care and to discuss your options, call my office at (626) 529-8347 or email me at [email protected].
Ricky Biel, CRPC® is a wealth manager with Haydel, Biel & Associates, an independent financial advisory firm serving individuals and families near Pasadena, California. The firm was founded in 2004 by Chris Haydel and Ricky Biel with a desire to provide unbiased, client-centered, community-based financial advice. Together, they built a practice that has grown into a family of caring, smart professionals committed to blending proven investment methodologies with cutting edge financial technologies that make it easier than ever to accomplish your goals. To meet and see how the HBA Wealth team may be able to help, contact them today at (626) 529-8347 or email Ricky directly at [email protected].