Insurance Needs to Consider as a Caregiver

SBLI of Massachusetts

December 15, 2010

A move into the role of caregiver to a parent or loved involves many new responsibilities. As a caregiver, you are responsible for the health and well-being of your loved one which means, unless you are able to hire a home health nurse to relieve you from some duties, you will be the primary adult responsible for feeding, medicating, bathing, and providing emotional support to your loved one. In addition to the physical responsibilities, you may assume certain legal and financial responsibilities. You may be appointed the power of attorney or trustee over assets, accounts, and trusts. You could be named executor of the will or beneficiary of the life insurance policies. While most caregivers take on all of these duties with a love and dedication that is incomparable, many are inexperienced in the type of financial planning they should be implementing to protect their loved one in the event of the caregiver’s death.

Protecting Your Loved One
In some caregiving situations, the parent or loved one receiving the care will have social security and retirement fund payments turned over to the caregiver. While this can be a big help, you still must consider protecting the regular income your family’s breadwinner brings in. By adding disability insurance coverage to your financial plan, you can make sure that some portion of your normal income is retained in the event of the disability of you or your spouse.
A Medigap insurance policy on your loved one can help bridge the gap between the cost of medical care and the payments Medicare makes. This relieves some of the financial burden on you, or your loved one, although it will require premium payment.

Life Insurance on the caregiver is a critical consideration. In the event that something happened to you, who would be in a position to assume the caregiver role? When determining how much life insurance to buy, you must first ask yourself:

• Will another family member be able to step in and care for your loved one?
• Does your loved one have a long term care policy that can provide nursing home care?
• Will a home health-care nurse need to be brought in after your death and, if so, will your family need to pay out of pocket for one?
• Will any other family members be willing to contribute funds toward healthcare expenses for the loved one, or will his or her retirement and savings be available for that purpose?

The answers to these questions will help you and your life insurance representative determine the right amount of insurance death benefit for you to cover any remaining caregiver responsibilities, while still providing a benefit for your spouse and children.