Recoverable Mistakes…and Long Term Care Planning

Most responsible adults have the ability to make smart decisions. We weigh multiple factors and we correct course when things don’t turn out as we had hoped.

One thing that we don’t often consider is the unrecoverable mistake. Perhaps it’s because some combination of good genes, upbringing by caring individuals, common sense, education and good luck largely steer us clear of making unrecoverable mistakes.

Luckily, even most big errors aren’t unrecoverable, or at least their consequences can be mitigated. One of the biggest factors that makes mistakes recoverable is time, with health following not far behind. For example, let’s say we made the mistake of investing all our retirement savings in one stock, and the value went to zero. Prognosis? If we are age 40 and healthy…painful but recoverable to at least some extent. If, however, we are age 80 and unable to work – that same mistake is unrecoverable.

The example just mentioned brings us to another important point: most 40-60 year-olds, in the prime buying ages for long term care insurance. They aren’t used to making financial decisions that may be unrecoverable if health changes. They are at the apex of their financial prowess. They are at the height of their careers. They perceive their own ability to either avoid or recover from any financial mistake as perhaps higher than they should.

Consider this: the person who would never put “all their eggs in one basket” when it comes to the stock market, and who wouldn’t consider dropping the insurance on his home or her car, will choose to not address the fact that they are totally uninsured for one of the largest likely expenses in old age: long term care. Like the young family with no life insurance whose breadwinner dies unexpectedly – the uninsured person who needs long term care can’t turn back time and apply. Although the need for care may not happen until age 80 or 90, it is the healthy adult, ages 40-60, who will determine if an unrecoverable mistake is made – or avoided.

More than half of people who live to age 65 will need long term care. Therefore, the odds are not in favor of those who are uninsured against a long term care event.

Think about it. Which action is likely to be unrecoverable: purchasing a long term care insurance policy…or not?