Insurance companies must be doing one heck of a job out there stirring the pot!

I don’t think a week goes by without me receiving a question about long term care insurance.

And, all too often, individuals and couples are beginning at “Point Five” when they really need to take a giant step back to “Point One”.

One of the reasons why they begin at Point Five is because an insurance agent has rushed right into the minute details of a policy before even diagnosing why you should even be thinking about any of this in the first place.

Or, if you even need to.

Not to pick on insurance agents, but they have an axe to grind. They don’t get compensated until you buy a policy and pay the premium, so there’s some urgency on their part to move the process along at a faster pace than what may be in your best interest.

However, this is too important to rush through, so let’s take step back for a moment and talk about Bob and Kathy.

What Bob and Kathy Must Know First…

• Bob and Kathy are 64 years old,
• They’re now both retired, so they receive no income from work,
• They’ve done their homework and created a comprehensive Retirement Blueprint™ which illustrates the following:

• • They receive $3,000 per month from social security, and $2,000 per month from pensions for a total income of $5,000 per month
  • On the spending side, they’ve done their homework and calculated that they need $9,000 per month to live exactly the way they want, including paying income taxes, taking vacations, and buying loads of presents for their grandkids
  • So, they need an additional $4,000 every month, or $48,000 per year, from somewhere else,
  • They’ve done a nice job saving, and their Retirement Bucket™, which includes all of their liquid savings and investments they’ve accumulated over the years, including IRAs, 401(k)s, and non-IRA accounts amounts to $2 million (a nice round number to work with)
  • Their Retirement Resource Forecasters™ illustrate that Bob and Kathy have enough money in their Retirement Bucket to provide them with that $48,000 per year including increases to keep pace with inflation (The “Silent Killer”).
  • They can achieve this without having to hit home runs with their investments. In other words, they can accomplish this without taking on loads of investment volatility and risk.

Now, the scenario I’ve just described to you with Bob and Kathy is precisely where I recommend you begin to have the long term care discussion!

If you don’t know these exact numbers that I just revealed in your own unique situation, then you can’t even begin to properly evaluate the financial risk of you getting sick.

Too many times, individuals and couples are confronting critical issues that affect them for the rest of their lives without any understanding of how the issues affect them personally.

They just use some “rule of thumb” that they read in a magazine, or they’re “sold” on one thought or another by a commissioned financial advisor.

It all has to start with you knowing your own personal numbers first.

Once you’ve done that, then you can make educated decisions that you can feel confident with.

So, my most important recommendation so far when confronting your long term health care actually has nothing to do with health care or insurance.

It has to do with getting a crystal clear understanding of your personal financial risk.

Later this month, we’re going to take a critical look at the second piece of information you must work through before talking about long term care insurance.

Stay tuned!