Unexpected Crisis Devastates Assets Even in a Good Economy

In an uncertain world, the value of affordable Long-Term Care Insurance has never been greater. Guaranteed tax-free benefits will safeguard savings and income and reduce family stress no matter what crisis is occurring.

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Unexpected Crisis Devastates Assets Even in a Good Economy
6 Min Read March 15th, 2020 Updated:April 29th, 2020

Most experts were reporting that the economy was doing very well. While the President said it was “the best ever,” and the facts showed outstanding unemployment numbers, job growth, and substantial market growth.

All this good news was making many Americans feel good about their future or current retirements. Then, out of the blue, the virus crisis came on the scene. This virus was not the flu, but the flu was already impacting people worldwide.

According to John Hopkins, an estimated 1 billion cases of the flu are reported worldwide, 9.3 million to 45 million cases in the U.S. per year.

Since October 2019, the flu bug was hitting us the U.S. hard.

Virus Crisis Stresses Retirement Savings

The media attention was not on the flu but on the coronavirus, otherwise known as COVID-19. A John Hopkins world map shows much of the world now being impacted by this virus.

By now, most of us understand the health concerns with COVID-19. For many, the unexpected drop in market value was a significant concern. Despite the good economy, many people saw the value of their retirement funds (401(k), IRA, SEP) and other assets drop substantially. According to CNBC and the Wall Street Journal, this was one of the biggest market losses we have seen.

Some people think they can self-fund their future long-term care with the use of their investments. They explain they have plenty of assets to pay for their future care. According to experts, there are several flaws in this philosophy.

Self-Funding Long-Term Care is Challenging

When a person suggests self-funding, they mean they are using their own money. When you self-fund your long-term care expenses, the money won't be available for lifestyle or legacy.

Many experts I spoke with say when a person tells them they plan on self-funding, what they really mean is they don't think they will ever need care in the first place. Despite the facts and common sense regarding the financial costs and burdens of aging, some people are just in denial. The consequences can be tremendous on family and finances.

The recent virus crisis created an unexpected panic sell-off. The losses were fast and furious.  Since you will never be able to time these unexpected events which cause market losses, or know when a recession will hit, it makes self-funding a bit of a gamble.

Market Corrections Often Come Without Warning

"If there is anything we have learned over the last several decades is stock market corrections occur quickly and without much warning."  

Brent Donarski, a leading expert on long-term care planning and owner of a national agency My LTC Specialist.

"These unexpected events create a real unpredictable challenge for those considering self-funding the actual cost of long-term care. With short-term interest rates near zero and a market in bear territory, a well-intentioned self-funding plan won't work, especially if your need for extended care occurs during one of these events." 

Brent Donarski

You will never know at what point you will need long-term care. People require care for many reasons; often, you have little or advance notice. An illness, accident, or just the impact of getting older are all reasons we need care.

For example, one of the biggest reasons older people require long-term care is due to falls. You won't predict a fall.  Cognitive decline can sometimes come on fast. Trying to time these events so you can self-fund is just not realistic.

If you, or most likely, your family, are forced to sell off assets to pay for your future care, it might be during one of these market downturns. The selling of assets would be at a loss. That loss still could be a taxable gain. You get hit twice. Not only are you using your money, but it is costing you more due to bad timing which is out of your control.

Will Your Family Make the Same Care Decisions as You Would?

The other question to ask is, would your family make the same decisions you would otherwise make for yourself. Will they spend your money on the care you prefer? Will they make decisions based on financial considerations or quality of care?

Sometimes family members will attempt to become caregivers. Being a caregiver is stressful and places tremendous burdens on both the caregiver and the caregiver's family. Allowing a family member to be a caregiver is not a good solution.

Many experts say the virus crisis is an excellent example of why affordable Long-Term Care Insurance is a better solution. The guaranteed tax-free benefits from one of these policies will give you access to your choice of quality care either in your home or in a facility.

Long-Term Care Insurance Provides Guaranteed Benefits

With a Long-Term Care policy in place, you will never worry about market timing. You will never be dependent on loved ones to make decisions or provide care for you. Your family will have the time to be family as you maintain control and independence.

Premiums are based in part by your age at the time of application, your health, family history, and other factors, including the amount of benefits you purchase. Long-Term Care Insurance is custom designed, so you get to decide how much help you wish to have in place.

Plus, premiums vary dramatically for the same benefits. You could pay well over double the premium. This is where an experienced Long-Term Care Insurance specialist comes into play. There are several options available to make getting older easier on those you love.

“Today planning for your future care needs has never been easier and with great options. Planning ahead with a predictable guaranteed benefit plan is something all pre-retirees need to seriously consider.” 

Brent Donarski 

Specialist Offers Accurate Quotes and Professional Recommendations

Donarski says to be sure to seek the help of a real specialist. Most insurance agents and financial advisors have little or no experience in this area. They will cost you money and perhaps make significant errors in coverage options.

Use a qualified and trusted Long-Term Care Insurance specialist to help you shop and find the right company based on your situation. A specialist will provide accurate quotes and give you professional recommendations. Insurance premiums are regulated. You can you the expertise of a specialist to find the right options for you and your family.

LTC NEWS Provides Exceptional Resources

LTC NEWS has an outstanding comprehensive Long-Term Care Insurance Guide. Take a few minutes and review it by clicking here. https://www.ltcnews.com/resources/guides/the-ultimate-long-term-care-insurance-guide

Forty-five states offer special Partnership Long-Term Care Insurance policies with dollar-for-dollar asset protection. 

Don't wait until the next crisis or after your health starts to fail to start planning. The best time to plan is in your 40s or 50s when you still enjoy good health and much lower premiums.

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About the Author

Linda is a freelance writer interested in retirement planning, health and aging.

LTC News Contributor Linda Kople

Linda Kople

Contributor since October 31st, 2017

Editor's Note

Don't wait too long and discover you have few choices when dealing with the growing costs of future long-term health care. Long-Term Care Insurance will provide the guaranteed tax-free benefits to pay for quality care options you want, including in-home care. There are federal and state tax benefits, although some states are considering taxing people on earned income if they do not own an LTC policy.

Take action now to safeguard income and assets and ease family stress. There are many options to choose from; one will fit your budget. Don't delay; LTC Insurance is medically underwritten and priced, in part, by age when you obtain coverage. 

In the states considering adding an LTC tax you must have qualified coverage in place before the tax is implemented to avoid paying the tax.

Seek Professional Help Planning for Long-Term Care

Experts recommend seeking the help of a qualified and experienced Long-Term Care Insurance specialist to help you find the right coverage. A specialist will match your age, health, and family history with the right coverage at the right price. 

Long-term care is a very specialized area, and few insurance agents and financial advisors have the expertise. Find a specialist who represents the top companies as premiums can vary over 100% between insurance companies. Leading specialists will often have over 500 clients with Long-Term Care Insurance.

A specialist will save you money, and you will have peace of mind knowing they are making the appropriate recommendations - Work With a Specialist | LTC News.

Planning Tools and Resources Available on LTC NEWS

Planning for the future is never easy, but long-term health care planning can be very complicated and comes with many emotions. Getting the right tools and resources will make the process much easier.

One of the goals is to reduce the stress and anxiety usually placed on your family at the time of crisis. LTC NEWS can be beneficial in providing you with important information for you to consider.

LTC NEWS has put in place several resources, including:

You might have questions and LTC NEWS provides the answers for many of the most asked questions here - Frequently Asked Questions | LTC News. Find all the resources available on LTC NEWS - Resources for Long-Term Care Planning | LTC News.

Does Mom or Dad Need Help Now?

If your family is already in crisis and you need to find help and the right care services for mom or dad, LTC NEWS can help. We have put together several comprehensive guides to help you in your process.

Start by reading our guides -  

If your loved one is lucky enough to own a Long-Term Care Insurance policy, be sure they use it. Sometimes families wait, thinking they can save the benefits for a rainy day. Waiting on using available Long-Term Care Insurance benefits is not a wise idea. 

Get Assistance in Filing a Long-Term Care Insurance Claim

Many insurance companies have issued Long-Term Care Insurance policies over the years. Filing a claim can sometimes be complicated unless you know what to do or get expert help and assistance. 

Don't allow the claim process to stop you from using the benefits available in an LTC policy. Quality care obtained early will help provide a better quality of life and reduce the risk of a deep decline and facility care. 

If you need help in starting the process of a Long-Term Care Insurance claim, LTC NEWS can help. LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with a Long-Term Care Insurance policy. We have teamed up with Amada Senior Care, who will do all the work - free with no obligation. 

Get help finding quality caregivers or long-term care facilities and get recommendations for a proper care plan, whether a person has a policy. - Filing a Long-Term Care Insurance Claim | LTC News

Advantages of Reverse Mortgages 

Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance. You might be eligible at younger ages as well. 

Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, and even help with cash flow during your retirement. 

Learn more by asking questions to an expert. Mike Banner, LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages. 

- Just "Ask Mike." - Reverse Mortgages | LTC News.

Share Your Knowledge - Be A Guest Contributor for LTC NEWS

LTC NEWS is open to contributors to share their stories with the world. 

You can write a story or ongoing column for LTC NEWS. You can write about many topics, including aging, caregiving, health, lifestyle, retirement planning, and long-term care, to name a few.

Be sure to write for our core target audience of adults aged 40 and older. Our audience is worldwide; however, our primary target is the United States, Canada, the United Kingdom, Australia, and other English-speaking nations. 

Improve your website or blog's SEO and gain exposure and traffic at the same time by being a contributor to LTC NEWS. 

You can even promote yourself, your business, and your website or blog. However, it must have editorial content exclusive to LTC NEWS and not just an advertisement. It can include links to other sites, and you can share the article link once published on your website or social media.

Email your story idea or article: newsroom@ltcnews.com - LTC News Contributors | LTC News

LTC NEWS - Your Marketing and Advertising Partner

Use LTC NEWS to drive traffic to your website and help you attract people interested in your products and services. Plus, you can improve your website's SEO so more consumers can find you when they search for your products and services.

There are various marketing options available with LTC NEWS. Traditional advertising, sponsored content articles, strategic alliances, and more are available. 

Learn more about how LTC NEWS can help you market your business, drive traffic, and improve SEO - Advertise With Us | LTC News.

Shared Links

LTC NEWS offers a 'helpful links' page so readers looking for additional information can find them easily. You can get a dofollow link to your website on LTC NEWS in exchange for a dofollow link on your site.

Let's work together and help consumers who search for us on the web - Site Request | LTC News.

You can also affordably purchase a dofollow link to your website or blog on LTC NEWS. Just contact the advertising department.

Sharing News with LTC NEWS 

Include LTC NEWS in your press release distribution. If your group, organization, business, political committee, etc., have news to share, send it to LTC NEWS. Email - newsroom@ltcnews.com  

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