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Health Is the New Wealth: HNW Individuals, LTC Insurance and Healthcare

Health Is the New Wealth: HNW Individuals, LTC Insurance and Healthcare

February 29, 2024

A perspective shift occurs in the wealth landscape; many now recognize health as the new wealth. Healthcare, long-term care (LTC) insurance, and other wealth-related financial instruments have become essential considerations for HNW individuals. In this article, we discuss understanding health as an invaluable asset, the necessity of LTC insurance, and the healthcare needs and considerations of HNW individuals.

A different perspective on wealth and health

Wealth isn't only evaluated in terms of financial prosperity or accumulation of assets; without health, monetary wealth holds limited – if any – value. The perspective that health is wealth is hardly ground-breaking; this perspective links back to the understanding that personal well-being, quality of life, and longevity are priceless possessions beyond monetary possessions.

HNW individuals often have high-stress professions and intense work regimes that may undermine their health quality. As a result, they may choose to commit portions of their wealth towards maintaining and improving personal health.

The role of LTC insurance

LTC insurance is a financial tool essential to protecting assets while helping provide monetary resources to pay for extended care in an LTC facility. LTC insurance covers the cost of long-term care services not typically covered by traditional health insurance, such as assistance with routine daily activities like bathing, dressing, and eating.

Why do HNW individuals need to consider LTC insurance? As people live longer lives thanks to advancements in medical science, the likelihood of requiring long-term care increases dramatically. According to estimates by the U.S. Department of Health and Human Services, about 56% of individuals over 65 will require some form of long-term care in their lifetime. For HNW individuals without LTC insurance, the financial burden of these services could be substantial, impacting personal assets or business holdings.

Another consideration for HNW individuals if the need for LTC arises, is selling assets to pay for care, which can mean a substantial tax gain, even when selling assets at a loss. If an HNW individual has an extended LTC event, the cost of care may drain the estate's assets.

The healthcare needs of HNW individuals

HNW individuals may desire private LTC facilities designed for their healthcare needs. Given their lifestyle, they may choose specialized medical attention beyond what standard healthcare policies offer—for example, more privacy, flexibility, and responsiveness from healthcare providers.

LTC plans are customizable to individual needs and preferences, offering a broader range of services through policy riders at an extra cost. Sometimes, LTC policies may provide access to exclusive treatments and top medical specialists globally.

The intersection between health and wealth for HNW individuals is also giving rise to their increased investments in wellness and health-driven enterprises. There is a more significant focus on preventative healthcare, encompassing everything from regular health check-ups to personalized exercise and diet regimes, reflecting that prevention may be better than cure.

In conclusion, HNW individuals must rethink their wealth management strategies, including adding LTC insurance and personalized healthcare to their estate plans. Longevity trends and the inherent unpredictability of health make planning for LTC an essential consideration for wealth accumulation, preservation, and sustainability. After all, wealth has more meaning when having the health to enjoy it.

 

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine if Long-Term Care may be appropriate for you, consult your financial professional.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by Fresh Finance.

LPL Tracking #516734-02

 

Sources:

https://aspe.hhs.gov/sites/default/files/documents/08b8b7825f7bc12d2c79261fd7641c88/ltss-risks-financing-2022.pdf

https://www.ltcnews.com/articles/high-net-worth-individuals-find-value-in-long-term-care-insurance

https://insurancenewsnet.com/innarticle/9-reasons-wealthy-clients-should-consider-ltci