In this three-part series, John Moakler looks at the concept of putting bumper guards around doctors’ financial plans. Today, in the third post of the series, he looks at an often-overlooked threat to your retirement.
Doctors: Want to know about a big threat to your retirement that you are probably overlooking? Here’s the answer: long term care expenses. They’re such a huge factor that in 2017, a financial planner in Alberta was successfully sued by his clients because he didn’t tell them about long term care insurance.
I think it should actually be calledlivingterm care insurance, because you can turn it on and off during your lifetime, according to when you need it. Consider the case of my client, who as a 33-year-old business owner was unable to qualify for disability insurance because his income was not high enough. He did however qualify for LTC insurance, which does not have an income test, and which pays out up to $104,000 per year in tax-free coverage (you get to determine the benefit).
He had a motorcycle accident that left him unable to do two of the six activities of daily living, which triggered a payout that supported him throughout his recovery. Once he had recovered, he went back to paying the premiums, so he will be protected if another qualifying event occurs during his lifetime.
Here is an attractive feature we can add in some cases: if both spouses have an LTC policy, and one qualifies to claim, the premiums on both policies are put on hold – but the coverage is still there. For this feature to kick in, you would first have to be in the plan for a minimum of 10 years.
Over the next 25 years, an estimated $1.2-trillion will be needed for long term care support in Canada, and only half of that will be covered by government. Let’s make sure you’re 100% covered.
John Moakler is a nationally recognized financial planner specializing in financial health care for medical professionals. He rigorously diagnoses your financial condition and then prescribes a customized, written Financial Treatment Plan. If you’re a dentist or doctor and want to learn more – or get started on a plan just for you – contact John today.