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Question for the Money Doctors

Question submitted on Apr 25, 2012.

Question

In your opinion, is it necessary to buy a long term care policy if you believe you have enough funds saved within your retirement investments. (exam: $2MM in investments/$80-90k anticipated annual income). By my calculations, I should have enough to cover L/T care for both of us if necessary, especially in light of the benefit limitations put on L/T care policies.

Answer

In my opinion, some individuals can self-insure their long-term care needs.  As you stated, that person needs to have sufficient assets.  You should keep in mind the impact inflation will have on the costs of long-term care.  It is very possible the costs will increase at a rate that will eventually be greater than your annual anticipated income.  You will also want to examine the inheritance, if any, you plan to leave after your passing.  An insurance policy could help to preserve some assets for the next generation of your family instead of being faced with spending down the assets you worked so hard to accumulate.

You may want to seek out a Personal Financial Specialist at www.findapfs.com  to help you weigh the benefits of self-insuring.


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