Every Woman Should Have a LTC Plan
Many of the women we see portrayed in movies and on television are independent, wealthy, and confident, with great digs, a closetful of designer clothing, and high-powered careers.
But real women, as self-sufficient and sophisticated as they may be, face a more complicated set of realities:
- Women usually live longer than men.
- Women often end up single, even if they were once married (because of the first bullet point above).
- Women, on average, earn less than their husbands.
- Women can often end up with decreased income if they outlive their husbands.
- Women tend to be more conservative investors over the course of their lives.
The cumulative result of these factors is that women are much more likely than men to need long-term care—and much less likely to be able to afford it. When you consider that the average cost, nationwide, for a home health aid (44 hrs. per week) is $54,912 per year, and the average for a private room in a nursing facility is now more than $105,000 per year, a strategy for funding potential long-term care expenses is an essential component of any woman’s financial plan.
Concerns about aging
Women have many concerns surrounding aging that a long-term care plan can help to alleviate. Some women, for example, may be worried about having sufficient assets to leave to children, grandchildren, or charities. Because a long-term care plan provides cash flow to help pay for health care expenses, it can also help protect your estate, enabling your financial plan to execute the way you intended.
Many women also worry about becoming a burden on family members. A long-term care policy enables your family to manage care instead of serving as the actual caregivers. In addition, it can give you the freedom to choose the place where you want to receive care, whether in your home, adult daycare, an assisted living facility, or a nursing home.
Sometimes, though, families assume that a spouse or children will provide care, if and when it’s needed. If that’s the case, it may be time to ask a few tough, but reasonable, questions:
- Who exactly will be the caregiver? Have you discussed this with the family?
- Are family members capable of caregiving? Do they have the necessary skills? Are they geographically close?
- Are family members able to dedicate time and money to the caregiving effort? Are they willing to compromise work or their own family responsibilities to become the caregiver?
Keep in mind that caregiving can be a significant burden for the caregiver, both physically and mentally. In fact, a long-term illness can often take a bigger toll on a caregiver than a spouse’s death, turning his or her “golden years” into an unexpectedly stressful time.
What about self-insuring?
Affluent individuals may believe that self-insuring is the best way to fund long-term care expenses. That way, if they never need care, they haven’t “thrown away” money on a policy they didn’t need. If you fall into this category, linked-benefit products may be a good option to help pay for care. A linked-benefit policy is a single-premium life insurance policy that provides long-term care benefits—as well as a tax-free death benefit in the event long-term care isn’t needed.
It’s important to utilize resources and expertise available to help you decide on the best long-term care strategy for your situation and goals. Remember, a woman who plans for long-term care protects her financial plan, her family, her health, and—not least—her independence.
1 Genworth 2020 Cost of Care Survey, conducted by CareScout (August 2020)
Greg Patterson and James Allen Canady are financial advisors located at Atlantic Wealth Management, 712 Bridges Street, Morehead City, NC 28557. They offer securities and advisory services as Registered Representatives and Investment Adviser Representatives of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. They can be reached at 252-515-7800 or at [email protected].
© 2021 Commonwealth Financial Network®