Tag Archives: Great News

Discount Dental Plans now available in Washington State

Just got an email saying that discount dental plans are now available in Washington State.  This is great news.  While they are not dental insurance, they do offer a lot of features that regular dental insurance does not.  Goto http://www.briangruss.com/links/dental-plans or give Brian a call today 509-927-9200

The Risks of Self-Insuring for Long-Term Care

The Risks of Self-Insuring for Long-Term Care

Statistics show that one in every five people who reach the age of 65 will eventually require some form of long-term care (LTC). This means a great deal of us will face the exorbitant LTC costs at some point in our life.

On top of that, Americans are living increasingly longer lives. Recent estimates give a healthy 65-year-old man a 24% chance of living to at least 90 and a healthy woman a 35% chance of living that long. Obviously, this is great news. However, the longer we live, the more likely we are to suffer from a LTC event.

Unfortunately, Medicare does not cover LTC expenses. This is why it’s critical for each and every family to plan ahead for their LTC needs. Without the proper protection, such an event could devastate a family’s finances.

Can you afford to self-insure?

If you have a high net worth, you may assume that you’d be able to cover LTC costs on your own when necessary. However, financial experts point out that LTC planning is crucial for everyone—even for affluent families. That’s because the costs of self-insuring for long-term care may be much more expensive than you realize.

Consider this: the national average daily rate for a nursing home is currently $209 a day.* Therefore, a one-year stay would cost $76,285, which adds up to $381,425 for a 5-year stay.

Let’s say a couple named Bob and Jan are in their mid-50’s. Bob and Jan have $2 million in liquid assets, not including their primary residence. Therefore, they assume they’d have more than enough funds to cover a 5-year-stay in a nursing home.

However, Bob and Jan aren’t factoring in these additional costs of self-insuring for long-term care:

  • Inflation: The ever-increasing rate of inflation could quickly magnify the cost of long-term care. What costs $200 today could cost as much as $1,000 30 years from now.
  • Taxes: If you are forced to sell an asset that has appreciated in value or take a qualified plan distribution to cover the cost of long-term care, you will probably face some hefty tax consequences.
  • Lost investment opportunities: If you end up paying out of pocket for long-term care for five years, you are losing out on other investment opportunities. If you were not self-insuring for long-term care, you could be investing that money elsewhere.

Considering these factors, let’s look at the real cost of long-term care for Bob and Jan. Let’s say that Bob will require long-term care in 30 years, when he’s in his 80’s—an age when many individuals require long-term care. In 30 years, today’s daily nursing home cost of $209 could balloon to more than $900 a day due to inflation. Therefore, if Bob required long-term care for five years, he and Jan would pay $1.66 million out of pocket. Obviously, this is a significantly higher amount than the $381,425 they initially calculated.

On top of that, let’s say Bob and Jan must take distributions from their qualified retirement plans to cover the cost of long-term care. As high net worth individuals, Bob and Jan have a combined state and federal marginal tax bracket of just over 37%. That means they could face an additional tax liability of $610,000 if they take large enough distributions from their retirement plans.

Consequently, the total cost of Bob’s long-term care event could exceed $2.27 million. That means if Jan lives another five years after Bob dies, she may have no funds remaining to pay for every day expenses—much less for her own long-term care event.

LTCI is for everyone

As you can see from Bob and Jan’s scenario, even high net worth families need to consider purchasing long-term care insurance (LTCI). Because LTCI helps cover the exorbitant costs of long-term care, it can protect your family’s finances if you were to face a long-term care event.

If you want to discuss your long-term care insurance options, meet with a Brian Gruss. Brian can evaluate your unique situation and help you customize an effective plan.

* Source: Genworth Financial 2008 Cost of Care Survey April 2008. The cost of care in a metropolitan area may differ from the state average rate.

Long-Term Care Planning: Are You in Denial?

Long-Term Care Planning: Are You in Denial?

By now, you’ve probably heard of long-term care insurance (LTCI). Because LTCI helps cover the exorbitant costs of long-term care, this insurance can protect your family’s finances if you were to suffer from a debilitating condition.

So why do countless consumers pass on purchasing this valuable insurance? While some families truly can’t afford LTCI, most have a different excuse: they simply don’t want to deal with the emotions that long-term care planning can stir up.

Obviously, it’s not pleasant to imagine a scenario that involves you being unable to care for yourself. However, this is not an excuse to avoid planning ahead for the possibility of such an event.

Avoiding denial

If you, like thousands of other U.S. consumers, have not given much thought to long-term care planning, you may be in denial. Too many people assume that because they are healthy now, they will remain healthy throughout their lifetime. Unfortunately, there are numerous medical conditions and diseases that even relatively healthy people can contract in their later years.

Just look at the numbers: Statistics show that one in every five people who reach the age of 65 will eventually require some form of long-term care. This is why it is crucial to plan ahead.

Plus, with continual advances in the medical industry, Americans are living increasingly longer lives. Recent estimates give a healthy 65-year-old man a 24% chance of living to at least 90 and a healthy woman a 35% chance of living that long. While this is great news, there’s a catch: the longer we live, the more likely we are to suffer from a long-term care event. This is why it’s critical for each and every family to avoid denial and start thinking about long-term care.

The financial factor

Many families claim that they haven’t bought LTCI because it simply won’t fit into their budget. Considering that LTCI can be quite costly, this is a viable excuse for some families. However, many people simply underestimate the value of LTCI. Not only can this insurance protect your family’s finances—it can also protect their emotional and physical well-being.

That’s because a long-term care event doesn’t just impact families financially. There are many emotional effects, as well. Studies show that 60% of all long-term care is provided in a home or community setting. More often than not, the ill person’s spouse, children or other family members end up providing that care—which can cause emotional turmoil for everyone involved.

Caring for a sick adult also presents many physical challenges. Many caregivers suffer from a lack of sleep and increased stress levels, which often leads to health problems of their own.

However, if you have a LTCI plan in place, you may be able to diminish many of these negative effects for your loved ones. An effective plan not only removes much of the financial burden, but it can also ease some of the physical and emotional hardships of caring for a sick loved one.

Devise a plan today

It’s clear that every family stands to benefit from an effective long-term care plan, which could include LTCI coverage. If you don’t think about long-term care today, you are basically deferring the responsibility to your loved ones. After all, they will be the ones who will have to care for you if you suffer from a long-term care event.

If you want to discuss your LTC coverage options, meet with Brian Gruss. Brian can evaluate your unique situation and help you customize an effective plan.