Here’s an instructive tale in the context of estate planning, which we pass along to our readers across Arkansas and elsewhere today to underscore the importance of thinking broadly regarding estate matters and objectives.
The segue to such a discussion, which we impart from the details provided in a recent national media account, is rather jarring and abrupt.
To wit: Reportedly, scores of thousands of long-term-care policyholders seeking protection against soaring health care spikes in their advanced years could lose their paid-for protection following a regulatory order that their insurer — a company with a national scope and reputation — liquidate its business because of seemingly insuperable financial difficulties.
What that fundamentally means to many of those long-term and dutifully paying individual and family policyholders is this: They could likely lose paid-in premium amounts saved up in their accounts and applicable toward health care in later years that exceed the maximum payout amounts provided by “guarantee funds” that exist in all American states.
In many instances, the ceiling applicable to those funds’ payouts (which differs among the states) is well beneath what policyholders have dutifully funneled into their accounts over many years.
The scenario regarding insurer Penn Treaty is obviously frightening and, hopefully, an occurrence that is aberrational and not repeated. Given the constant and material rise in health care costs, though, it is far from inconceivable that such a story might again surface, and repeatedly.
Indeed, the above-cited New York Times article notes “warnings about problems with long-term-care insurance since the early 1990s.”
No risk can ever be safeguarded against in an absolute manner, and that is seemingly true especially in the health care realm, where uncertainty abounds regarding future costs, program direction and other key variables.
From an estate planning context, a story like the above is immediately relevant and instructive, because it imparts the importance of planning across the universe of matters that are together centrally important to individuals and families in a given case.
Health care is obviously one such concern. So, too, though, are matters concerning property preservation, lawful tax avoidance, gifting, charitable contributions, inheritances and a host of other matters.
Attending to all such variables in a comprehensive way can go far toward promoting overall goals and reducing risks associated with any single concern.