Long Term Care

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Long-Term Care Insurance explained

In most cultures, the children take in their elderly. However, this may not be feasible for you or your loved ones. Perhaps they are in a different state, prefer to avoid dependence on family, or the family simply must work and cannot be there for you.

The final years of our lives often are the most expensive. Why? Medical cost! Some common medical conditions that can cost a lot include:

  • Alzheimer’s

  • Stroke

  • Cancer

  • Injuries

  • Diabetes

  • Obesity

  • Nervous system disorders

Many people never anticipate needing someone to change their diapers, bathe you, dress you, feed you, or just get out of bed. Yet, for thousands of people, this happens to them particularly near the end of life. The problem is that most people spend the majority of their retirement savings on...retirement. So, as you get toward the end of your life, a family member often becomes responsible for your caretaking.

Options:

Traditional Long-Term Care insurance

  • Provides a guaranteed tax-free income stream to cover LTC Expenses

  • Premiums are deductible as medical insurance (limits apply)

  • Full Underwriting

Pros:

Cons:

  • Premiums are subject to future increases

  • If you don’t need it, you don’t get anything back

Asset-Based LTC insurance

Purchase a Life Insurance Policy with an LTC benefit

  • Provides a guaranteed tax-free income stream to cover LTC expenses

  • Linked to a life insurance policy

  • Single-Premium or Flex Pay options are available

  • Leverages existing assets 4-5 times or more for LTC coverage

  • Cash value

  • Tax-free death benefit

  • Simplified or full underwriting

Pros:

  • Guaranteed premiums

  • Cash value component

  • LTC claims do not use the Life insurance death benefit

Cons:

  • While premiums remain constant, they are higher than traditional LTC policy premiums.

Purchase an Annuity with an LTC benefit

  • Provides a guaranteed tax-free income stream to cover LTC Expenses

  • Linked to an annuity contract

  • Single-Premium

  • Leverages existing assets 2-3x more for LTC coverage

  • Cash Value

  • Death Benefit

  • Simplified Underwriting

  • Tax-advantaged treatment for non-qualified funds

Pros:

  • Guaranteed Premiums

  • Cash value component

  • LTC claims do not use the Annuity death benefit

  • Simplified underwriting typically allows more people to qualify

Cons:

  • While they remain constant, premiums are higher than traditional LTC

  • Lower leveraging of assets than life chassis Based LTC insurance

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