Here we are at the end of the year and that means it’s almost time for NEW YEARS RESOLUTIONS! For me, these are always things I’ve been putting off and this is an opportunity to force myself to act!

Unfortunately, after a while, they become depressing, since for the past several decades, I’ve never been able to keep one for more than a few days. Perhaps it’s the thought that counts, not the outcome.

In any event, the years are passing by, and as I read the morning paper, more and more people I know or spent time with in years past appear in the obituary section. As someone who is still actively involved in solving financial issues for clients, I came across this idea recently and resolved to focus some effort on it as a NEW YEARS RESOLUTION.

It has to do with what we refer to as Long Term Care Insurance. There is an increasing chance that we will become goofy soon and unable to fully look after ourselves. And this can put huge pressure on those around us whom we love and who love us. And no matter how much we deny it, it is accompanied by a significant financial cost. And there is a way to remedy that pressure.

Insurance is referred to by many financial planners as “risk management”. That is because when we deal with it at all, we don’t want to be thought of as selling insurance; so typically, we don’t even use the word.

But I would suggest that in the case of our older clients, the word “risk” is not appropriate. How many of my clients only have the “risk” of dying? Did you know that, according to the 2012 AALTCI Source Book, 69% of 65-year-old clients who own Long Term Care insurance (LTCi) will make a claim? That is a risk so high that it could almost be considered an inevitability.

So here is an interesting thought. I’ll bet almost every reader of this blog owns insurance on their house (that never burns) and car (that rarely gets in an accident). Mindful that most of my clients are over age 50, most of them have not purchased LTCi. Many of them do not have life insurance. And here I am, charging them to manage and grow their investments so that it will be worth more when they die than it is now. ‘Cause if I’m not, why are they paying me.

That said, I have two ways to deliver on my promise to do a better job of growing your money than the bank can do….or that you can do on your own. First, put some life insurance in your portfolio to increase the net results at death. The insurance benefit is certainly going to outperform the banks….and tax-free. Then cause you to buy LTCi to protect as much of your investments as possible. If never needed, the cost can be netted out against the increase generated by the life insurance.

While I’m on the subject:
The IRS has released the 2013 limits for deducting LTCi premiums (Rev Procedure 2012-41)

Attained Age Before Close of Taxable Year*
40 or less $ 360 (2012 is $350)
More than 40 but not more than 50 $ 680 (2012 is $660)
More than 50 but not more than 60 $1,360 (2012 is $1,310)
More than 60 but not more than 70 $3,640 (2012 is $3,500)
More than 70 $4,550 (2012 is $4,370)

For calendar year 2013, the per-diem benefit limitation (that which can be received tax free) under Section 7702B(d)(4) for periodic payments received under a qualified long-term care insurance contract is $320 (the 2012 limit was $310).

The last part will be mostly gibberish for many of you. That’s OK. Just know that I or someone like me has a potential solution, so make it your NEW YEARS RESOLUTION to talk with someone about it.