funding extended care - optimal age question

last column piece, we touched on extended care implications on your family and you.  this piece shall concern the optimal age when you should begin consider funding your own private extended care plan.  next piece shall concern the various financing strategies towards maximizing your dollars.

our conversation becomes more relevant in the context of the national debt crisis.  even though both political parties posture grandiosely, you can count on disruption to the medicare, social security, and medicaid entitlement programs.  we can reasonably assume that you will have undependable future federal government pension and social safety net benefits.

within the national debt crisis context, you may ask what can i do about the future problem.  you can do nothing, and someone will have to pay, more than likely your own future kin; or, you can put your foot down by putting your own extended care plans in your own hands.

so, the question becomes, where to begin?  consider beginning your core extended care coverage funding in your early 40's, when most insurance carriers consider underwriting extended care plans:

a) your health and age in your early 40's may stack the odds that you can obtain coverage at a discounted rate.  although carriers can change future premium rates based on experience across a group, they generally do not require future medical underwriting.  the health and age rate factor remains substantially relevant when you consider postponing similar coverage to your 50's or 60's.

b) your employer and/or you can completely pay-up a premium based policy beginning in your 40's and ending at your retirement age.  this policy could serve as your extended care core coverage, avoiding any potential future rate increases with a paid-up structure.  the investment remains more palatable starting at age 40 to age 65, rather than age 50 or 60 to age 65.

c)  your employer and/or you can begin layering coverage across your cash flow and asset wealth age spectrum throughout peak earning years.  with core coverage obtained earlier, you can allocate peak earning cash flow towards additional coverage through a single premium plan.  these plans may provide more flexibility but generally require upfront investments exceeding $50,000 and prior forethought.

some financial advisory professionals may consider obtaining core extended care coverage in your early 40's overkill.  overkill depends on the particular situation, but why wait to buy something tomorrow when you may get a bargain today?  pushing that decision off may also prevent you from getting coverage, period, even if you could afford it several times over.

consider beginning the conversation with your financial professional early in your prime earning, healthy years.

blake mendez

www.menco-finco.com