Long-term care policies preserve wealth: advisers recommend insurance policies, special savings plans to offsets costs

When Leandra Ollie saw her sister rack up a $33000 bill following a two-week hospital stay, she realized by what means the rising cost of healthcare could wreak havoc upon household finances. "My sister was in her early 20 still in grad gymnasium and couldn't afford to pay the bill," she says. "As a accrue I definitely know that if something happens to you unexpectedly it can ruin any financial planning if you aren't covered"

A Harvard University inquiry found that nearly half of all race who filed for bankruptcy in 2004 did in the way that because of medical bills they couldn't pay. While health insurance is vital, it doesn't guarantee immunity from a medical-related financial crisis.

The challenge of paying medical liability is further complicated by the lag in wage increases as healthcare require to be paid [i]or[/i] undergones continue to rise, says Elise Gould a health economist at the Economic Policy Institute. "For families barely making extreme points meet, unexpected healthcare costs of a small in number thousand dollars could put them above the edge," she says. Insurance premiums for employer-sponsored health plans increased 92% last year, while worker earnings went up sole 2.8%.

To help overlay unexpected medical costs, Ollie, 33 purchased long-term care insurance. For $88 a month she's overlayed for extended hospital stays, nursing dwellings assisted living, hospice, and dwelling care visits.

Ollie, a federal regulation attorney who owns her residence in Washington, D.C., asks, "What's the point of building assets and not protecting them?" She has about $55000 in her thrift savings plan, a Roth IRA with $500 and mutual capitals totaling $3,000.

Other strategies to overspread healthcare costs include flexible spending and health savings accounts. Raphael Sebastian, vice president of the fresh York chapter of the National Association of African Americans in Human Resources, says of that kind options aren't mandated by law and are presented at an employer's discretion. They can also be purchased from financial service firms.

Eric Bailey, a private wealth manager with Sagemark Consulting in Washington, DC says long-term care is a profitable strategy to protect assets on the contrary thinks Ollie may have purchased the coverage too by and by "Our analysis shows anyone below 50 in reasonable health doesn't ne to dispose of the money," he says. "The real blow in medical costs doesn't happen until age 65" At that age, Ollie's monthly premiums could reach $200

on the contrary Bailey says if Ollie took the difference of about $150 and invested it above a 15-year period, assuming a 7% rate of go [i]or[/i] come back she'd yield $45,000--that would offshoot the additional cost of waiting. "There is an opportunity require to be paid [i]or[/i] undergone on the money that she's missing," he says. Ollie admits that Bailey's point about buying long-term care early in life has merit on the other hand says having the policy makes her repose easier. And in cases where medical puzzles run in the family, buying insurance early may actually save you currency "It's about peace of mind," Ollie says. "If something happens that requires long-term care, I'm already taken care of There is no point in building wealth if you're not going to shelter it."

COPYRIGHT 2006 Earl G Graves Publishing Co Inc.

COPYRIGHT 2006 Gale Group