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Achieving Maximum Flexibility When
We Can No Longer Touch Our Toes
By John C. Morris
When I was in fifth grade, my gym teacher always
made us stretch for 10 minutes before we got to play dodge ball, basketball,
soccer or whatever the day’s activity was. He said that we could prevent
many injuries if we were flexible enough to touch our toes. Trust me when
I say that this makes zero sense to a 10-year-old boy with a giant red rubber
ball hurling at his head. How being able to touch my toes was going to prevent
having “Spalding” tattooed on my forehead was beyond me at the
time.
The American Heritage® Dictionary of the
English Language, Fourth Edition, defines flexible as “[having]
the ability to respond and adapt to change”. Now physically, we can
control our flexibility through regular stretching and exercise up to a certain
point, but after a while, time takes its toll and the body begins to lose
flexibility. The same holds true from a financial standpoint. However, through
regular attention and maintenance, we can maintain our financial flexibility
and independence throughout the course of our lives. Many people neglect
one particular aspect of their financial planning, leaving themselves exposed
at a time when they have the least flexibility from both a physical and financial
standpoint. This time in our lives is retirement, and the problem that some
could face is a catastrophic event that triggers the need for costly ongoing
custodial or skilled care. The potential solution is long-term care insurance.
According to research by the American Society
on Aging, 60 to 70 percent of Americans who live to age 65 will require such
assistance at some point in their lives. If you have not considered long-term
care insurance when addressing your retirement planning, you could be exposing
your family and yourself to a great financial risk. Long-term care insurance
provides you with a plan of care as well as a means of addressing the ongoing
costs associated with it.
So, how can you secure a plan of care that will
give you the most flexibility and freedom when you are perhaps at your weakest?
When looking at a long-term care policy, you may want to consider:
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How long can you
wait before you start to receive the benefits?
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How long a period
do you want the benefits to be payable?
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How much benefit
do you need?
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Have you accounted
for inflation?
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What are the insurance
carrier’s ratings and total assets?
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To achieve maximum financial flexibility, you
may also want to consider an Indemnity policy model as opposed to a medical
reimbursement policy model. Medical reimbursement policies reimburse you
for your actual long-term care expenses, up to the dollar amount you choose,
for each day of care subject to your policy limitations. An indemnity type
policy pays a fixed dollar amount for each day of care up to the limits of
your policy, regardless of the cost of your care. This allows the insured
to receive the full benefit amount that they have chosen, no matter what
the cost of the care they are receiving.
Flexibility is something we often take for granted
when we are young and often long for when we are older. Why allow the physical
hindrances of aging to impact the financial nest egg that you have worked
so hard to secure? Long-term care insurance could be a vehicle that gives
you financial flexibility well into your golden years, even though you can
no longer touch your toes.
John C. Morris, CLTC, is an associate of FranklinMorris,
Coordinating Broker for the Bar Associations Insurance Agency, Inc. For
more information on the insurance benefits available to MSBA members, visit
our website at: www.msba.org/departments/membership/baia/franklinmorris.pdf.
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