Divorce comes with plenty of lifestyle changes at any stage of life, but divorcing late in life offers increasing complexities and some very important post-divorce financial planning concerns. As Gray Divorce becomes more common we are finding new and different financial planning concerns that are specific to individuals and couples divorcing in their late 50’s or 60’s.
What is Long Term Care Insurance?
Long Term Care (LTC) Insurance is a relatively new form of health insurance designed specifically for long term care in a nursing home, home based health care and other expenses not covered by Medicare, Medicaid and traditional Medicare Supplemental insurance.
Long Term Care Insurance is purchased from one of many insurance companies offering coverage in your state. Generally policies provide a daily maximum benefit amount for a specified period of time. Ultimately this provides a benefit pool from which future benefits will be drawn. At $200 per day for 1,080 days (3 years) you would receive a total benefit pool of $216,000. If you draw less than the $200 per day maximum, your benefits will last longer. Policies come with a myriad of options and choices outside the scope of this article such as daily benefit amounts, benefit periods, elimination periods and cost of living adjustments. These choices should be made with the assistance of an expert in the available products.
In order to qualify for benefits a person, generally, must need help completing at least two activities that are necessary for daily functioning, such as:
- Personal hygiene and grooming
- Feeding oneself
- Dressing and undressing
- Functional transfers like getting out of bed
- Voluntarily controlling urination and bowel movements
OR need substantial supervision to protect the individual from harm due to cognitive impairment.
Why do you need it after a Gray Divorce?
Any friend or family member who has ever played the role of caregiver knows how physically demanding and emotionally taxing it can be.
Long Term Care insurance will pay for a skilled nurse or caregiver to come visit a home and provide in-home care up to 24 hours a day. The caregiver might cook meals, clean the house or just offer assistance with bathing and other daily activities to avoid accidents and insure quality of life is not compromised. Most importantly, it will provide peace of mind to those who care most about your health
We feel obtaining Long Term Care Insurance is one of the most important financial planning decisions to be addressed in post-divorce planning for a newly single person in their 50’s or 60’s. This age range is considered to be the ideal time from a cost benefit perspective to purchase coverage and the loss of the built-in caregiver should be the catalyst to motivate.
Decisions such as these could play a significant role in your post-divorce future. Hiring an experienced CDFA will ensure a more secure, comfortable future for YOU. Make sure you sit down with us at PDM before finalizing your settlement agreement.