Prepare financially for illness … just in case

We all hope to live long and healthy lives, so we do what we can to take care of ourselves through proper diet, exercise, and avoiding unhealthy activities. However, none of us can predict our future, so it is worth being prepared for anything including serious physical illness or the onset of some type of mental disability, such as illness. Alzheimer’s.

Of course, you may never be confronted with these infirmities, but be aware that they could upset your long-term financial strategy and put considerable stress on your loved ones. What steps can you take to deal with these threats?

First of all, make sure you know what your health insurance covers and how much you may have to pay out of pocket for the treatment of conditions such as cancer or kidney disease. If you’re on Medicare (supplemented by Medigap) or Medicare Advantage (Medicare Part C), you’ll want to know everything about deductibles, co-payments, and coinsurance. However, if Alzheimer’s disease or another type of dementia is involved, Medicare may not cover the costs that could be incurred in an assisted living facility, so you may want to consult a financial advisor, who can suggest ways to help you. protect against the costs of long-term care, which can be quite high.

Your next step is to make sure you have adequate cash. It’s hard to predict how much you might incur in dealing with critical illness, but it’s a good idea to have enough cash on hand, rather than tapping into your 401 (k) or other accounts. of retirement. So if you are retired you may want to keep up to a year of living expenses in a low risk liquid account.

Here’s another important step: Update your estate plan. I hope if you are seriously ill you can recover. But it’s always a good idea to review your estate plan to make sure everything is in order, like your will and living trust, if you’ve created one. If you’ve kept your life insurance, you’ll also want to make sure your premiums are still paid. And don’t forget to review your beneficiary designations on your 401 (k), insurance policies, and other financial documents, as those designations may replace instructions in your will.

As part of your estate planning, you may want to include an Enduring Power of Attorney for Finances, which allows you to appoint someone to manage your financial affairs if you become incapable, and an Enduring Power of Attorney for Health Care, which allows you to appoint someone to make medical decisions for you if you are unable to do so on your own. You can also create a healthcare directive or living will to express your wishes if you do not have a health care power of attorney or if the person named in a health care power of attorney cannot be. attached in case of emergency. And since estate planning can be complex, you will definitely want to work with a legal professional, and perhaps your tax and financial advisors as well.

You might think it’s a little grim to prepare yourself financially in case you fall seriously ill or if your life is affected by Alzheimer’s disease or some other mental disability. But it’s a positive gesture – you protect yourself and your loved ones from anything life throws at you.

This article was written by Edward Jones for use by Jeremy Self, your local Edward Jones financial advisor. Edward Jones, member of the SIPC.

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