While estate plans and long-term care plans seem like something an elderly person should worry about, taking care of these processes sooner rather than later could help individuals in Michigan and elsewhere prevent risks and unintended consequences to financial plans.
What options do you have when it comes to long-term care planning? The first thing that should be understood is that a financial plan needs a solid foundation. This is built from four major building blocks, which include health, disability, life and long-term care. Each of these building blocks must be addressed and properly built up to ensure a secure financial future.
With regards to long-term care plans, an individual has three basic options. The first is to self-insure by putting aside money, placing funds in specific accounts. However, this option is truly only an option for those with a very large net worth. A second option is to purchase a long-term care policy. While this option guarantees coverage if anything were to occur, it still requires the payment of a premium.
The third and final option is a linked-benefit plan. This is a combination of the first two options and requires individuals to put aside their assets and provide them to an insurance company that covers a long-term care plan with a life insurance policy or an annuity contract. This option provides flexibility and helps individuals determine how many benefits they want and how much money should be put aside for that benefit.
Developing and drafting a long-term care plan can be challenging. However, taking the time to carefully draft this plan can help individuals avoid issues and difficulties later in life.
Source: Thinkadvisor.com, "3 options for long-term care planning," Nov. 29, 2016