Hi Toni:
Recently, I had a bad car wreck and ended up with a minor concussion from hitting the windshield. My wife was not hurt. I am 55 years old and have not thought about long-term care planning due to a life-changing event. I work for a large company and the company’s financial adviser has never discussed this with me. What do I need to do?
Steve, Las Vegas
Steve:
Great question because Americans do not realize how your life can be turned upside down in an instant.
My life-changing event was a few years ago when I had an accident while grilling steaks. My life flashed in front of me as an 8-foot flame burst out of the gas propane tank, burning my hair, face and left arm. All I could say was HELP! I was taken by ambulance to a burn unit at the Houston Medical Center, but I was blessed because I only had a first-degree burn. I was released from the emergency room just needing Neosporin cream.
Steve, let’s discuss what financial plans and legal documents you will want to have in place to protect you, your family and your elderly parents.
Financial plans to protect your family:
1. Life insurance:
Term, universal or whole life insurance if you are losing your life insurance benefit from your employer when you retire. I always advise our Toni Says Medicare clients to have personal life coverage aside from work coverage as extra protection for you and your family.
2. Long-term care plan:
— Traditional long-term care policy: The younger you are when you and your spouse purchase a long-term care policy, the lower the premiums will be. My advice is to search for a long-term care plan while younger and in relatively good health. Make sure that the policy covers care at home and in-facility care.
— Hybrid life and annuity policy: Many life/annuity insurance policies have a provision if you need long-term care. You can receive a certain amount of long-term care with your life/annuity policy’s face amount.
3. Short-term care plan:
Assists with paying for care at home or in a facility for a maximum of two years. Does not cover the same benefits as a long-term care plan. Underwriting may not be any easier past age 65 than a long-term care plan.
Legal documents to protect your family:
1. Power of attorney for you and your spouse is the cornerstone of a financial management plan. It is a written document whereby someone is appointed to manage that person’s financial affairs in the event of illness or incapacity. Signing a power of attorney is critical to ensure a person’s future independence in the event of illness or incapacity. Without it, one risks having his or her affairs managed by a court-appointed guardian, possibly a stranger, under court supervision and often without the ability to have any input.
2. Medical power of attorney (known as a healthcare power of attorney) gives someone you trust the legal authority to act on your behalf regarding healthcare decisions if you ever become incapacitated or unable to communicate.
3. A living will is a written statement that details the type of care you want (or don’t want) if you become incapacitated. A living will bears no relation to the conventional will or living trust used to leave property at death.
Adult children of elderly parents need to be sure that their parents also have these three legal documents in place.
Always be prepared!
Toni King is an author and columnist on Medicare and health insurance issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email info@tonisays.com or call (832) 519-8664. Her books are available at www.tonisays.com with a bundle discount for Toni readers.
