The Gift of Health
HEALTH, DISABILITY INCOME, AND LONG-TERM CARE INSURANCE
Would you quit smoking if someone gave you $376,450 as an incentive to do so—today? You could take the money now or, if willing to wait 35 years from the quitting date, you could receive $1,059,279. Even 35 years from now, that would be a pretty decent addition to a retirement nest egg.
How did I come up with those numbers? I took the example of a reasonably healthy, self-employed 30-something male who is married and planning to start a family. Then, I assumed the additional money he spends on smoking and smoking-related costs every year would be inflated and hypothetically invested, earning seven percent per year. I’ll prove it to you later in the chapter.
The poorest man would not part with health for money, but the richest would gladly part with all their money for health.
Charles Caleb Colton
Fiscal and physical health are often seen as separate and distinct, but like most areas of our lives, money plays a significant role. This is also true in our pursuit of healthy living and the risk management of an unexpected health event. In this chapter, we’ll discuss three types of insurance: health insurance, disability income insurance, and long-term care insurance. They are often lumped together, but there is virtually no overlap in the benefits they provide and the risk from which they shield us. Each of them could easily consume its own chapter, but those would be three fairly ...