Hecht Insurance Advisors, LLC Blog
Why LTC Planning Is Essential for Boomers
The hefty price tag
If you or a loved one suffers from an illness that requires long-term care, get ready for some sticker shock. A year-long stay in a nursing home typically can cost between $40,000 and $80,000, often more. While prices vary by state and the type of care required, one thing is consistent across the board when it comes to long-term care: it's phenomenally expensive.
Just take a look at the average costs of various types of long-term care in the U.S.:
As you can see, these costs can quickly add up and eat away at your nest egg. For example, let's say you hire a home aide to assist your husband just three times a week for four hours. At $19 an hour on average, that would come out at $228 a week. That adds up to nearly $12,000 a year. Unfortunately, Medicare does not cover these exorbitant long-term care expenses.
To top it off, informal home care is simply not a realistic option for most families these days. After all, most children of baby boomers are struggling to balance their own work and family life. They simply don't have the time or resources to care for sick parents.
This is why it's critical for each and every family to plan ahead for a potentially expensive long-term care event. Without the proper protection, such an event could devastate a family's finances.
The simple solution: LTC insurance
How can boomers handle the skyrocketing costs of a potential long-term care event? The answer is simple: long-term care insurance. Without LTC coverage, a nursing home stay or another long-term care event could destroy your family's finances.
Because LTC insurance covers many of these expenses, this valuable coverage will not only protect your finances it will also help you to maintain your current standard of living if you or your spouse requires long-term care.
Without LTC insurance, the cost of a nursing home stay or a home health care aide could wreak havoc on your finances and whittle away at that nest egg you've worked so hard to build. Don't burden your loved ones with this kind of emotional and financial strain. Create a long-term care plan today to save your family a lot of heartache and stress tomorrow.
If you want to discuss your long-term care insurance options, call us. A professional can evaluate your unique situation and help you customize an effective plan.
How Having a Dog Can Benefit Your Health
More exercise - When you own a dog, you should be taking it out for walks every day. And the benefit is that when you're exercising your pooch, you too are exercising. Walking 30 minutes a day can do wonders for your health.
Less stress - Numerous studies have shown that people with dogs have lower stress levels. Engaging with your dog in whatever form can reduce your stress.
Illness detection - Dogs really see the world through their noses thanks to their keen sense of smell. Some dogs are sensitive enough to detect the onset of epileptic seizures, or the presence of some cancers. Many dog owners have reported their dog sniffing, licking or nudging areas of the body that later turned out to be cancerous.
More allergy tolerance - Children who are raised around pets have a reduced chance of having allergies. And growing up with a dog can boost immunity to pet allergies later in life.
Boosting brain development - Dogs boost brain development in children, along with emotional growth and connection to others.
Stronger heart - Studies have shown that petting a dog can lower your heart rate, and male pet owners tend to have reduced rates of heart disease.
Less chance of depression - Dog owners are less likely to be depressed. The companionship they offer has been shown to help people who have been diagnosed with clinical depression, largely because caring for another living thing can help relieve symptoms of depression and make people feel more positive.
Safety - Dogs are like a living alarm system. Barking dogs can keep burglars at bay and they can alert you if someone is snooping around the outside of your house, giving you a greater sense of security.
Second-to-Die Life Insurance: Ideal for Estate Tax Planning and More
This can be important when a family's wealth is tied up in illiquid assets that are difficult to sell. With a second-to-die life policy in place, the family or estate executors receive the tax-free cash death benefit right away, and can use that to pay estate taxes, rather than be forced to sell off assets like small businesses and real estate to raise the cash.
Otherwise, heirs may be forced to sell assets in the estate at heavily discounted prices, or at a very poor time in the market to sell, to meet the estate tax deadline.
Second-to-die policies also typically have lower premiums for a given death benefit than standard single-insured life insurance policies.
Use of trusts to move life insurance out of the taxable estate
Who owns the insurance policy itself? It may be prudent to set up an irrevocable trust, and have the trust own the life policy, rather than own it directly in your own name.
Otherwise, the life insurance policy would be considered part of the taxable estate, which would increase your tax bill. Setting up a properly constructed irrevocable trust will help you avoid this problem.
To set up the trust, speak with a qualified attorney and your tax advisor. Only a licensed attorney can write the documents required to set up the trust and ensure that it meets the requirements necessary for the assets in the trust to be considered separate from the taxable estate of the deceased.
Once the trust is established, the trust can then become the owner of the life insurance policy.
But, the applications of the second-to-die life insurance policy don't stop there. Even if you don't expect your estate to be big enough to be subject to federal estate tax, there are a number of other uses for this type of life insurance:
There are other specialized applications where second-to-die life insurance works extremely well as a planning tool. To see if this type of policy would benefit your family, call us at 540-712-2199, schedule an appointment, or video chat.