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Featured Advisor



Asset Preservation Advisors




City:Atlanta

State: GA



BIOGRAPHY:
APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Financial Planning Strategies: Should I Buy LTC Insurance?

Should long-term care insurance be one of your financial planning strategies for retirement? Learn more about the pros and cons of LTC insurance.

| BY Adriana Reyneri

Should long-term care insurance be one of your financial planning strategies for retirement? Only a minority of Americans thinks so, according to Kaiser Health News, which reported that 10 percent of U.S. seniors had long-term care insurance as of 2010.

“Given the complexity of these policies, experts agree it's tough to decide whether they're right for you,” according to Kaiser. “The policies have many moving parts.”

Among other features, long-term care insurance tends to have high premiums and a long waiting period. People begin paying into the policies at a relatively young age, but don’t typically make claims until they are in their 80s. These features contribute to the low usage of  LTC insurance among financial planning stra tegies for retirement.

Long-term care insurance may be less popular among financial planning strategies, but the product can fill a gap for middle-income Americans who are too wealthy to qualify for Medicaid, but lack sufficient resources to self-insure their long-term care. The costs of long-term can can run into the hundreds of thousands of dollars, according to Kaiser, and, while the Medicaid program pays for roughly 70 percent of U.S. nursing home patients, beneficiaries must have less than $2,000 in assets. (Millionaire Corner research shows that the likelihood of buying long-term care insurance is higher among less affluent investors.)

Unwillingness to think about old age, illness and dependency is another reason long-term care insurance ranks low in popularity among financial planning strategies, according to FPAnet, the website of the Financial Planning Association, which explains, “Just thinking about the need for long-term health care raises a myriad of potentially disturbing questions:  Who will make decisions about my care when I am unable? How can I make sure I’m not a financial burden to my family?”  (Aging and long-term care costs are the top concerns of high net worth investors, according to our research.)

Long-term care planning is one of several financial planning strategies important to retirement and estate planning , according to the website, which also recommends creating a will and establishing medical power of attorney.