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Much is said these days about the equality of the sexes. And while there is every reason that men and women can and should stand equally before the law, there is a significant difference as we plan for our futures – life expectancy. According to World Health Organization data published in 2016, the average life expectancy for a woman in the United States is 81.6 years, compared to 76.9 years for a man. Of course, a longer life expectancy is often seen as a good thing, which it generally is. However, living longer means that women may need to give particular consideration to their care in those “extra” years.
Long-term care insurance (LTCI) has been around for quite some time. Like any insurance, LCTI provides a way to transfer risk to another party. Despite its hefty price tag, LCTI may be an especially wise investment for women preparing for their later years. Consider that if you need special care as you grow older, those costs can be substantial. Regular home visits by a health professional can easily reach $50,000 per year, and these costs are significantly higher for skilled care. Assisted living facilities can run upwards of $45,000 per year, and nursing homes will often exceed $115,000 per year.* What’s more, Medicare does not cover long-term care (other than limited home care following a medical procedure), nor do most health insurance policies. And Medicaid will only cover long-term expenses after “impoverishment,” meaning that most of your personal assets have already been depleted.
It’s important to consider the possibility that your financial assets may be seriously impacted by the need for long-term care. And sadly, the simple fact that women have that longer life expectancy has led to an increase of long-term insurance rates for single women. The American Association for Long-Term Care Insurance estimates that single women pay between 40 and 60 percent more that single men. Furthermore, that difference is even greater if the policy includes benefits that grow with inflation. If you are married, you can shop for a couple’s policy, while both partners are in good health, which will even out the premiums for both.
Although there isn’t usually a reason to shop for a policy before age 45, the younger you are when you first purchase a policy, the lower your premiums will be. In fact, if you wait until your late 60s or into your 70s, you could even be denied coverage altogether. With costs increasing and consumers seeking solutions that are not “use it or lose it” in nature, many insurers have created products have offer both LTCI and other benefits. Among the most popular are permanent life insurance policies that provide tax-free benefits for care, but also provide payment of any remaining assets to one beneficiaries at death.
Age comes to us all, and so do its infirmities. And, yes, women likely have more years to look forward to, which means that additional attention should be given to long-term care. Speak to Ambassador Advisors today about your options. With their tax planning expertise, the professionals at Ambassador can help you arrange assets to limit your tax liability and allow more legacy for charity and family—as well as to determine the best approach for your financial well-being into your golden years.
Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposes of avoiding penalties that may be imposed by law. Each tax payer should seek tax, legal or accounting advice from a tax professional based on his/her individual circumstances.