Even if your filthy rich, long-term care insurance may be the best way to make sure you have a good quality of life when you’re old.
A long-term care insurance (LTCI) policy is an important financial planning tool. It helps cover the costs incurred by policyholders who can no longer take care of themselves due to illness, injury or old age. The policies usually protect the insured for expense that traditional health insurance, including Medicare, may not cover as well for periods of time that go far beyond what disability insurance would cover.
If you’re wealthy, do you still need LTCI? Some small-business owners believe that if their net-worth is in the high seven- or eight-figure range, it’s pointless to buy LTCI since they can basically afford to pay for any type of care they choose. This would be a mistake, as there are some compelling reasons to purchase LTCI even if you’re a multimillionaire:
Not all wealth is liquid. You may be worth millions, but how easy is it to convert that wealth to cash? Perhaps bad timing or luck means you’ll need the insurance just when your valuable assets can’t find a buyer or the price is depressed for the short term. LTCI can ensure that you don’t have to sell at fire sale prices.
Not all heirs are kind. Even though it’s your money, your heirs may not see it that way. Long-term care costs can easily reach six figures per year and over the course of a lengthy illness could deplete millions of dollars. This could cause tension, or worse, destroy families.
A little about Mike Periu
Periu founded Proximo, LLC nearly 15 years ago. The company provides small business education and training services with an emphasis on finance and technology.
Periu teaches empowerment through entrepreneurship and economic opportunity. He regularly appears on television and radio talking about these subjects.
Periu also writes for leading blogs about finance. These include: American Express OpenForum, Yahoo! Finanzas and the Huffington Post.
Periu studied Finance and International Business at Georgetown University. He is a Board member at the Council for Economic Education.
