Insuring Your Retirement Savings

David Treece | Apr 10, 2025

Insuring Your Retirement Savings

A survey from the Kaiser Family Foundation* revealed that LGBTQ+ health disparities are off-the-charts.

It revealed that 65% of LGBTQ+ adults in the US reported facing discrimination in their everyday lives—double the rate of their straight counterparts.

In healthcare, one in three LGBTQ+ people report experiencing negative interactions compared to 15% of straight/cis adults.

Also affecting the overall health challenges LGBTQ+ adults face, they are twice as likely to have experienced homelessness, with pronounced disparities among Black and lower-income individuals. Mental health disparities are also stark.

All of these point to the need for LGBTQ+ individuals to ensure that their financial plans include comprehensive health insurance coverage.

Let’s discuss the types of coverage and why you need them.

Disability Coverage

We often think about standard health insurance policies, but there are other kinds of health-related insurance that you should consider. Short-term and long-term disability insurance are critically important while you're working to replace your salary if there's a sickness or an accident and you can't work.

These plans are usually available as a group benefit. If you don't have it as a group benefit, you can purchase it individually.

Chronic/Critical Illness Coverage

Other types of insurance that you might be less familiar with are chronic illness and critical illness. These kinds of insurance will pay if something goes wrong. For example, a critical illness, if you have cancer, a heart attack, or an organ transplant. Chronic illness is similar to long-term care insurance, where if you are disabled and can't do certain things chronically, then that insurance coverage will kick in.

I had one client who didn't understand what he had. That violates one of my rules—I always want you to know what you have and how it works. He came to me with a plan he was paying into. He thought it was for retirement. However, it was a life insurance policy with chronic and critical care illness riders. It turned out he had been diagnosed with a form of leukemia. I called in to understand these benefits with him present, and it turned out he could make a claim, and he received a great deal of money from that policy.

Life Insurance Payouts

A lot of us in the LGBTQ+ community may remember during the AIDS crisis that there were viatical settlements. This was where you could sell a life insurance policy. The life insurance industry has changed to incorporate a lot of these benefits now in the policies that are issued. For example, there's a terminal illness rider. It could be that you are diagnosed with a terminal illness. Rather than necessarily having to sell a policy, you may be able to get an advance on the death benefit.

Or, you may have a policy with a large death benefit that you're paying, and it could be that you do want to sell it. There are legitimate companies that will buy these policies. It may be a solution to stop paying premiums and benefit from the policy itself rather than leaving a death benefit to somebody who might not be as big of a priority.

Medicare

When I'm talking to somebody and they say, "Oh, when I turn 65 and I get Medic-Medicaid- or, no, Medicare ..." they have to think about it. That tells me a lot that they don't understand these programs. And these are huge programs. They are so important. Medicare is part of the Social Security system. You have to pay in or get married to somebody who has Medicare benefits. When you turn 65, this is going to be your health insurance.

There are exceptions.

Group Coverage

If you have true group insurance — where there is a group plan of 20 or more employees — you don't necessarily have to enroll in Medicare A and B. Why wouldn't you? Medicare Part B has a premium to pay, and you would be double-paying for your coverage.

If you don't have true coverage, you do have to enroll or there is a late enrollment penalty. And it's not always straightforward. For example, you may say, Oh, I've got this plan where I used to work with retiree coverage. That might not count as true group coverage since you're not working there anymore. COBRA, for example, even though it comes from group coverage, does not count as true group coverage.

If you don't enroll at 65, you will get a penalty on your Medicare Part B premiums that is a penalty for life.

Then, there's Medicare Part C and Medicare Part D. There are all the supplemental programs and Medicare Advantage. There's a lot to know, but it's critically important.

Medicaid

Medicaid is a form of public assistance. This is where people often run out of money. Eligibility is based on having very few assets and a very low income.

Often in our planning, we're dealing with somebody, usually an older person in a long-term care emergency. Their assets are going to be depleted. We work with an elder law attorney who will create a Medicaid plan so that the person can get this public assistance benefit for their health insurance, including in t,his case, possibly covering nursing home expenses.

Medicaid can be very important, but we don't want you to expect to get it without planning for it and spending down your assets.

It's complicated. There's a 5-year look-back, for example. You cannot just say, well, I'm going to try to plan to get this and transfer assets out. They're going to look back 5 years to see if you did that, and then you will not be eligible.

Trusts

One of the things that happens, unfortunately, is somebody may have Medicaid already, and then they inherit money, which is going to blow up their health insurance. There are ways to plan for that with an eldercare attorney. You can leave the money to a trust for them so that they don't get this directly.