Long-term care insurance: ‘Who needs it?’

With people living longer, protecting your financial assets so that you’ll have enough money to last during your lifetime is as important as accumulating them in the first place. But with health care costs rising every year, one illness can wipe out a person’s savings.

Footing the bill

Medicare generally doesn’t pay for long-term health care. It pays only for skilled nursing facilities or home health care that falls under the category of medical necessities. It may be possible to use savings to pay for long-term health care expenses, but there are other considerations. For example, you’ll need to determine how much money may be needed. And to figure out that dollar amount would require estimating the type and length of service that may be necessary.

Additionally, income and assets that you’ve set aside for other retirement goals may be jeopardized if health care costs are higher than expected. And while you could invest for the potential expenses, investment risk may be a factor.

A potentially more effective alternative is an insurance policy that would provide the dollars needed to cover long-term health care expenses. Consider some of the advantages:

Policy guarantees. A guarantee, backed by the claims-paying ability of the issuing company, provides the assurance that money will be available to pay long-term care expenses when needed.

Investment  freedom.  You won’t need to be concerned with investment performance of assets set aside to pay expenses since an insurance policy shifts the responsibility for asset availability to the insurance company.

Leverage.   The capital required to purchase insurance protection is typically less than that needed to pay for expense due to the leverage insurance provides.

Tax benefit.   Qualified long-term care insurance policies pay an income-tax-free benefit.

Bottom line, you’re the only one who can determine what kind of policy is right for you. Work with your Financial Advisor to determine a plan to meet your needs and protect your financial future.

Insurance products are offered through nonbank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies.

This article was written by Wells Fargo Advisors and provided courtesy of

Christina A. Karas  Vice President-Investment Officer   in Boca Raton at 561-394-7561

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company

©2014 Wells Fargo Advisors, LLC.  All rights reserved.     0314-01200 [93190-v1] 03/14