Financial desirability of buying long-term care insurance versus the opportunity cost of investing the required funds.

The articles I have researched have noted the cost of medical expenses, and individuals must either have foreseen the need to have Long-Term Care Insurance, have put aside assets like annuities to pay for future medical needs, or lastly, they would end up draining all of their assets and then qualify for government assistance like Medicare.

I believe a few factors have changed this area of the medical industry and how individuals can afford these high medical costs for long-term care. The first factor is the change in need for long-term care. In the past, caring for elderly family members was commonly done by family members. Now that the work patterns of families have greatly changed and it is not uncommon for everyone in the household to work full-time, it leaves the elderly family members to seek care elsewhere.

The article I discovered highlights the fact that hybrid long-term care plans are becoming more economical to prepare for the future. Hybrid plans are ideal for the unexpected because they could either be used for long-term care insurance or they could function as a traditional life insurance policy if the individual ends up not requiring long-term care. “If LTC is not needed or if the policyholder dies, assets are transferred to the insured’s heirs,” (Gresham, 2016) The issue with hybrid plans is the fact that they can be costly.

The option of the long-term care policy and how to pay for future expenses when you don’t know how much or what they are going to cost is hard to understand and predict. If an individual is unprepared, it could end up costing them their entire financial well-being or burden on the government. I believe this situation is still being analyzed to see what the most beneficial way to prepare for the unexpected future is. It could mean the eventuality that Long Term Care Plans become more flexible and the clear choice or Hybrid plans become more affordable. Either way, it is important for people to prepare for the unexpected by saving and having investment income for the future.

References

Gresham, David A. “Seeking Stable, Efficient Coverage for Long­Term Care with Asset­Based Products.” Journal of Financial Service Professionals, vol. 70, no. 4, July 2016, pp. 47–62. EBSCOhost, proxy.ccis.edu/login?url=http://search.ebscohost.com/login.aspx? direct=true&db=bth&AN=116453498&scope=site.

http://www.aaltci.org/news/long-term-care-insurance-association-news/asset-based-long- term-care-insurance-buyer-study

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Read the FPA article entitled “The Financial Desirability Of Long-Term Care Insurance Versus Self Insurance” by Gold, Vander, Linden, and Herald.

This study compares the financial desirability of buying long-term care insurance versus the opportunity cost of investing the required funds. Research a scholarly (peer-reviewed) journal article pertaining to Long-Term Care Insurance from the Columbia College Library: (http://library.ccis.edu/home).

In 4-5 short paragraphs, critically assess one of the key statements or main theses and explain how the articles and/or authors support your position.

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