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Long Term Care Planning Alternatives
Long
Term Care Planning Alternatives Some companies are beginning to offer entirely new long-term care insurance products and planning strategies.
HYBRID LTC INSURANCE
One carrier’s approach to offering a more affordable alternative is to make the coverage like health insurance with a co-pay. The policy will pay 80% of your long-term care costs and you pay the other 20%. At time of application, you select the amount of protection you want in dollars that can range from $100,000 to $1 million.
Let’s say that you have been thinking about purchasing long-term care insurance for some time, but then you think about the “wasted” premium dollars in case you never use the coverage (wouldn’t that be the best thing that could ever happen?), and you hesitate to make the purchase.
LIFE INSURANCE WITH LTC RIDER
We all know that we will die one day, and we’ve been told there is a 40% chance that over the age of 65 we will need long-term care. Several long-term care insurance carriers have introduced life insurance policies with long-term care riders. This is a single strategy that plans for two financial risks: premature death and long-term care expenses.
The life insurance portion of the policy is permanent guaranteed universal life coverage. If you become ill, you can accelerate the death benefit to pay for long-term care. You can use the entire death benefit or a portion of it to pay for long-term care expenses. Any unused portion is paid to your beneficiary. If you never need long-term care, the entire death benefit is paid to your heirs.
The long-term care portion of the policy provides comprehensive coverage in the setting of your choice. All levels of home care (skilled and custodial), adult day care, assisted living and nursing home care are covered.
To fund the policy, you can make a single lump-sum payment or pay a premium annually depending upon the company.
LIFE SETTLEMENTS
Finally, what happens if you can’t afford a long-term care insurance premium or are uninsurable? A life settlement may be an option for you.
A life settlement is the sale of an in-force life insurance policy by its owner to a financial institution as the provider. The policy owner receives a cash settlement offer higher than the cash surrender value but less than the death benefit, and all ownership rights and obligations of the policy are transferred to the provider.
Certain circumstances make this a good planning tool: if you have a life insurance policy that is about to lapse or is no longer necessary due to changes in your estate; if you need more discretionary income to maintain your lifestyle or purchase long-term care insurance; or if you have been diagnosed with an ailment that makes you uninsurable for long-term care insurance and you need funds to pay for home or facility care.
ALTERNATIVES TO FIT EVERY PREFERENCE
The long-term care insurance market continues to evolve with new products and features that accommodate all ages, preferences and lifestyles. There is no reason not to plan for long-term care. The economy might be unstable but you can bring some certainty and control into your future. Call us today at 607-756-8538 for a free consultation.
© Long Term Care Associates, Inc., 2008
800-422-2655
607-756-8538
Fax: 607-756-4400
31 Greenbush Street
Cortland, NY 13045
susansuben@31greenbush.com
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