Planning for the Expected

Fortunately, you can plan ahead to protect yourself and your family against the financial consequences of deteriorating health, and in many cases, insurance may play an important role.

Let’s examine some of the ways you can employ insurance to help protect your
financial health.

Health Care Costs

For some, health-care costs represent a larger share of their budget as the years pass.

Recognizing this, you may want to consider Medigap insurance to cover the expenses that Medicare does not, which may add up quickly. You also might want to consider some form of extended-care insurance, which can be structured to pay for nursing and home-care services–two services that Medicare doesn’t cover.

Managing Your Wealth

The involvement you had with managing your investments may change as you age. For many seniors, that sort of day-to-day responsibility is unattractive and even untenable.

If that’s the case, you may wish to consider what role annuities can play. Annuities can be structured to pay you income for as long as you live, relieving you of the concern of your outliving your retirement money.² Certain annuities even offer extended-care benefits, which allow you to address two concerns with one decision.

Transferring Your Estate

If you’re like many seniors, you have a strong desire to leave something to your children, grandchildren and perhaps a favorite charity. Through the use of life insurance, you can pursue these objectives. For example, life insurance can be used to create an estate or to equalize an estate transfer among your heirs.³

Insurance will never be able to prevent the health issues that come inexorably with age, but it can be used to mitigate the potential financial consequences of them.

1. BrainyQuote, July 2013
2. The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact. Withdrawals and income payments are taxes as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies).
3. Several factors will affect the cost and availability of life insurance, including age, health and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policy holder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2013 FMG Suite.