If a family unexpectedly loses one of the incomes, the effect can be devastating. If we look around, there are tens of thousands of two-income families struggling to make ends meet. If unemployment cuts off one income you always hope this is just a temporary blip. But if the worst has happened, there’s no recovery. This means every family should aim to carry some level of financial protection. Sadly, the statistics show less than 45% of families have an insurance policy. That’s millions of household with children who will have no money to replace the lost income. So we should all make insurance a priority, particularly when economic times are uncertain.

One of the factors that should focus our attention is the decision by the Obama administration not to go forward with the Community Living Assistance Supports and Services Act (CLASS). This was intended to help people in need of long-term health care, but the costs of a public-supported approach are too high. This will leave it for the private insurers to continue to offer products to the market. So, if you suffer an injury or disease that leaves you in need of long-term nursing care, it’s possible you can use the insurance policy on your life to help pay for that care. Assuming there’s a cash value to the policy with a reasonable amount already accumulated, you can borrow this money or use the policy as security for a loan. Alternatively, you can either surrender the policy or sell it on the secondary market. With a conventional policy, this gives you a lump sum with which to pay for long-term nursing care. Except this is an inefficient approach.

If you borrow money, you have to pay it back or you end up with serious debt problems. The surrender or sale of the policy gives you a cash sum without strings attached. You can use the money until it has gone. The best option is to have a policy with an annuity built in. This way, you can trigger the annuity should the need arise or leave the investment to accumulate for the benefit of your descendants. Why provide for the possibility of long-term care? Medical science has been increasing life expectancy. As we live longer, the risk of needing long-term care also increases. So far, medical costs have been rising faster than inflation. The federal government has seen the problem and has helped with the Pension Protection Act of 2010 which allows accumulating cash value to be used to pay long-term care expenses without being caught by income tax.

When you consider how many boomers will retire over the next twenty years and who will need nursing care as they grow more frail, the urgency of getting life insurance quotes to explore the options should be obvious. If you do not already have a permanent life policy with an annuity option built in, look very carefully at the likely cash value in the current policy. When you know how much might be available should you borrow or sell the policy, get life insurance quotes to buy an annuity. That will give you guide prices for the purchase if the need should arise suddenly. Leaving it to the last minute to do your research can lead to mistakes.