Setting a Foundation

In previous post below on personal finance, I have laid what I think should be at the financial foundation of what people who consider themselves middle class to build upon.  You may disagree, and that is fine and I would like to hear about it in the comments below this post.  However, I think we all are aware of the changing dynamics of the middle class in that it is getting increasing more expensive to make ends meet and we can be one job loss, one unexpected calamity away from straight poverty, hardship, and disenfranchised. 

Russian Roulette?

If we have made it to the middle class, I assume you made great sacrifice and took the route to getting great education and the like or you got a trade or you just bust your butt through entrepreneurship and small business, but no one really teaches us financial literacy and so often life as we know it shows us that college education and money education are two different things.  If you are not marrying the two in today’s middle class, I hate to be the bearing of bad news, but you are playing Russian roulette that you will make it through the gauntlet of economic realities of today unscathed.

It becomes all the more important where we place our money priorities.  If you don’t have financial literacy, and really don’t care to gain, I still convey some here and that is you need protection for your own mortality.  Whether we are parents or not, this is important and the protection I speak of here is called Long Term Care Insurance (LTC).  

What is LTC?

So, what is it?  It is a type of insurance that kicks in when a person experiences a long term chronic illness or condition in which the person cannot do daily activities like bathing, dressing, toileting, etc by yourself.  You have to qualify for this insurance, much like life insurance, but the same criteria of evaluation is not done.  There is assessment of the probability for you having one of these events.  So the younger you can get one of these policies the less expensive and the better your chances health-wise.  Much like life insurance, you likely will not get one of these policies after an chronic event has occurred to you or the cost will be so prohibitive or the insurer will just deny you.

I am speaking to much of the middle class on this topic largely because these services require a decent income, but you have to have your priorities in order; otherwise, you’ll read this and continue as usual thinking you have a gauge on your mortality until what I describe below becomes a story that hits close to home.

Imagined or Real?

I’m forty, not old, but not young.  How many of you think 50 is just old?  I don’t, especially with people living longer due to advances in medicine and the like.  Imagine for a second that you are living a middle class lifestyle in a two income family but suddenly you have a massive stroke.  For a time your medical insurance will cover your treatment for stroke, but medical insurance doesn’t cover for your care once you are discharged.  You have a little or lot of money in your 401K.  Two able bodies have become one, but not only that, the one able bodied person must now figure out how they are going to provide the round the clock care that is needed.  A stop gap would have been LTC, but let’s say the reason for you not having was not that you couldn’t afford it or didn’t know about it, but that you simply thought you could get by without it.  After Medicare stops, you will need to drain your 401K before Medicaid pays.  The cost mentally, physically, and financially for care for a chronic illness are high not only for the cared for but for the caregiver as well.

Now, let’s bring in reality, my mother-in-law at 56 had a stroke, didn’t have extensive medical insurance, didn’t have long term care, didn’t have a partner that stood by her in sickness, didn’t have much in terms of financial assets to assist in her care, and now the burden is on her children to figure it out how to make due and do their best to take care of her.

Where Are Your Priorities?

So, if you are certain that this will not become of you in the future, continue your Russian roulette, especially, if you do so not because an insurer denied you coverage.  That will go back to my previous comments on priorities because if having 2 $30,000 cars in the driveway of your $200,000 house, $5000 vacations on credit cards, brand name everything is important to you, and you have little in the form of assets and/or investment acumen and single source of income, then in my humble opinion, your priorities are not on sound financial footing.  One uneventful chronic illness without protection, can change your reality in a instance, notwithstanding the realities of loved ones as well.

I am not here to give advice on all the facets of LTC as far as coverages or what not; instead, I am giving advice on the importance of you taking action now to inquire on getting LTC and not taking this issue lightly.  You should reach out to a professional for more information.  I have listed my agent below if you wish to get started. 

Conclusion

Your well being as a person and member of middle class grows increasing up to you and the choices which you make.  You have worked hard to get into the middle class and to stay there you must start to think of protecting your position and/or lifestyle.  Doing so requires that we have our priorities straight so that we can see the frailty of our mortality and our lifestyles and use LTC to protect us and our loved ones if a chronic illness were to occur.  The reality is not necessarily well off into the future like some might think and can occur in an instance and if we aren’t prepared not only will it be possible to lose the lifestyle we are accustomed, but the impacts and stresses of this reality can impact our loved ones in ways that cannot be expressed.  Take action now to see if you qualify, and if you do, then take action to ensure you protect and empower your loved ones before a potentially dreadful chronic illness impacts you. 

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