COVID-19 and Life Insurance: Are You Covered?

Not too long ago, everything was normal and seemingly under control. Since then, the spread of the pathogen has shaken the foundation of the world we once knew and exposed the vulnerabilities of our health care systems. On March 26, 2020, the U.S. surpassed China and Italy to become world leader in virus cases and deaths.1 As more confirmed cases arise, this has become a somber reminder of how brittle our health can be and more importantly the value of having a life insurance policy.

Should you get life insurance during a pandemic? While the simple answer is yes, it shouldn’t take a health crisis for you to consider financial protection for you and your family. When planning for the unexpected, life insurance is one of the best tools. It can help your family maintain the lifestyle they’ve become accustomed to and provide them with greater financial security for many years ahead. And if you already have a policy in place, now is a good time to revisit your coverage to ensure it’s sufficient.

The crisis may have challenged us with a new way of living, but our world doesn’t stop. We want to assure you that our team will continue to adapt and pursue the best interests of our clients. Don’t leave your family’s future financial security up to chance.

Alternative Funding Strategies for Long-Term Care

As we get older and become frailer, we may find ourselves needing help with everyday activities that’s as simple as getting dressed, eating, or getting in and out of bed. Even if we’re healthy, accidents may necessitate assistance with such activities. This assistance is called long-term care (LTC) and can be provided at home, in an assisted living facility, and in nursing homes. But LTC services aren’t cheap. The average annual rate for nursing home care (semi-private room) is $88,348, and costs continue to surge.1 While having a long-term care insurance (LTCI) policy may be the best option to cover the costs, it may not be feasible for everyone. Fortunately, there are other ways you can fund LTC:

1. Annuities. An annuity combined with LTC benefits can deliver a lifetime income stream that increases in the event of an LTC need for additional financial protection.2
2. Life Insurance. A whole, term, or universal life insurance policy can all be converted into a LTC benefit account. During this conversion, the policy ownership is transferred to an entity that acts as a benefits administrator, who assumes all responsibility for paying the monthly premiums.3
3. Health Savings Account (HSA). You can tap into HSA assets to pay for future LTC costs. Funds in an HSA rolls over year to year and withdrawals are tax-free if used for qualified healthcare expenses, including LTC and LTCI premiums.4
4. VA Benefits. If you’re a veteran or spouse to one, there are many different benefits programs available through the U.S. Department of Veterans Affairs. Veterans and their spouses are entitled to receive financial aid known as the Veterans Affairs Aid and Attendance Pension Benefit or A&A benefit, which can be used to pay for LTC.5
5. Medicaid. Under the reality that many Americans are simply living longer, this strategy becomes more viable the closer you are to running out of money. The government assesses income and asset levels when deciding who qualifies, so once total assets are low enough, Medicaid will kick in. However, it should be noted that private insurance will likely provide a better quality of life.6

The expenses of LTC may be reality for many of us in the future, but there are a multitude of options. It’s never too early or too late to think about LTC, so make sure to include it as part of your retirement plan.

Why Even Single People Need Life Insurance

Life insurance isn’t just for those married with children, single adults without children can benefit from it, too. When you’re single, healthy, and childless, a life insurance policy is probably the last thing on your mind. You might think that buying coverage is just another unnecessary expense; however, there are plenty good reasons why it could make sense for you:

• You have cosigned debts. While it’s a fact that federal student loans are discharged in the event of the borrower’s death, it’s not the case with private student loans—especially if you have cosigners. This applies to other cosigned debts such as mortgages, car loans, or credit cards. Your cosigners will bear the financial responsibilities that could be covered with the proceeds from a life insurance policy.
• You own a business with a partner. Life insurance can be the cornerstone of a business’s succession plan. In your absence, it can ensure a smooth transition and increase the longevity of the business you’ve worked hard to build.
• You want to leave a legacy. At some point, you may want children or you may end up caring for your parents, grandparents, or non-biological children. If you name them as your beneficiaries, the policy could help them cover everyday expenses if you were no longer around. You could also continue giving and provide a lasting legacy by naming your favorite charity as your beneficiary.

Life is unpredictable and has a way of changing fast. Life insurance is about protecting what’s important to us. We’re all leaving someone behind, and burdening loved ones with financial liabilities is probably the last thing we’d want to leave them with. Whether you’re single or not, chances are that you may relate with at least one of the scenarios above.