Revisit High Net Worth Clients About LTC Needs
By Mark Ameigh
There have always been people who feel the strength of their financial situation means they do not need long term care insurance.
However, recent events in the financial markets should cause prudent people to re-examine their assumptions about the basis of their future financial security.
After all, the stock market plunge has wiped away a lot of personal wealth over the past 18 months. Furthermore, the prolonged period we have seen of low interest rates, though helpful to home buyers, has squeezed people who are dependent on interest earnings. In fact, the drop in rates can be devastating to some individuals.
The combined effect of these trends may lead people who once believed they could self-insure the financial risk of long term care to recast the role of LTC coverage in their lives.
Take the example of a couple approaching retirement who had $1 million in assets, split 50/50 between equity and income producing investments. This couples plan was to use income-producing assets to supplement Social Security benefits. They had intended their equity investments to serve as an inheritance fund, but one they could draw upon to pay for LTC costs if necessary.
Now, due to the twin declines in the stock returns and interest rates, this couple is looking at a much different financial picture.