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Asset Based Long Term Care

Do you really need long-term care insurance?

Are you one of those younger retirees that see plenty of years in the future of having a happy, healthy, and active retirement? Well, that does sound great; I have to give it to you. But let’s change gears for a moment and think, what would happen if you have a debilitating illness or accident?

It’s very possible with the busy lives we lead today; that you may not have even given the possibility of  long-term care a thought yet. Well maybe you have a little, but I’m talking serious thoughts!

But let’s look at the facts:

If costs increase at 4.1% per year, the average cost of care in 30 years would be $250,000 a year.   — Bureau of Labor Statistics, www.bls.gov.

At least 70% of people over age 65 will require long-term care services at some point in their lives. — U.S. Department of Health and Human Services, www.longtermcare.gov, September 2008.

The national average for 24-hour home care or one year in a nursing home can cost more than $75,000 today, and can run higher in some states. — John Hancock Cost of Care Survey, conducted by CareScout, 2008.

If a chronic illness, disability or cognitive impairment, such as Alzheimer’s disease, leaves you unable to care for yourself for an extended period of time, long-term care may be required. Whether it’s delivered in a nursing home, hospice facility or even in your own home, this level of care can be expensive, and the cost is rising every day.

What are your options?

·      Medicare pays only for short periods of care, typically up to 100 days.  And the average stay in a nursing home is 2.4 years. (According to The Federal Long Term Care Insurance Program (FLTCIP).

·         Medicaid usually pays for low-income patients, and in mandated nursing home facilities, while you lose the right to choose where you’re cared for, and by whom.

·         Personal assets can be quickly eaten up, including savings and retirement plans, leaving no legacy behind for those you love.

·         Family members may assume the burden of care, at the risk of their own financial, physical and emotional well-being.

Long Term Care Insurance can give you control and peace of mind. Purchasing some type of Long-term care insurance now gives you control over future health care decisions, including where you go for care.

If you are employed full-time, your employer may already offer you some kind of Long-term care insurance. It’s important to be sure that any coverage he may offer will be enough to cover the cost of this level of care, should you ever need it. 

Explore your choices today. ….. Traditional Coverage or maybe Asset-Based Coverage ?

There is no doubt that everyone should have long term care insurance. There’s no argument there! The older we get, the more likely it is, we will have a care situation facing us, head on ! ……. As we keep living longer, the biggest risk we all face is longevity risk. It’s a multiplier of all the other types of risk we are facing or are about to face in our future. It’s simple, the longer you live, the more likely something’s going to happen !

No matter how you look at it: There’s a cost, and I mean a significant cost, to buy this type of coverage. But let’s look at the alternative. If you have a long term care need, and have to pay for your care services out of pocket, that could break the bank as well.  Just remember, as we age, the cost to purchase this type of coverage gets higher and higher. The longer you wait …… The more expensive it is going to be.

So how do we protect ourselves against this probability?

The cost of traditional long term care insurance is based on your age and health when you apply, as well as the additional benefits you select on your policy. Sometimes the underwriting of these policies can be longer than expected, so be patient.

As stated earlier, one of the biggest conversations that many folks have is not only about the cost of the this type of insurance, but what if I never use it? …… Well that question was heard, loud and clear, so something was done about it. It’s called Asset-Based Long Term Care Coverage.

Asset-Based Long Term Care policies are built on the chassis of either a life insurance or annuity contract, or perhaps both. They are sometimes referred to as combination, or hybrids, or linked-benefit policies.

With these policies, if a care situation arises your life insurance death benefit or annuity cash accumulation benefit is accessed to pay for qualifying long term care expenses. These types of policies usually have set limitations as to the amount and time, that a benefit will be accelerated, so it’s very important to be aware of these limitations. Some contracts even say, that if your life insurance or annuity contract has been fully accelerated, you will continue to receive long term care benefits through an extension or continuation provision in the contract. 

To address the concern: ….. What if I pay for this insurance for many years and never need it? ……….. Asset-Based Long Term Care contracts usually have a value that your named beneficiaries will receive at your demise.  So if you don’t use it ….. You don’t necessarily have to lose it !

Please take the time to look over the valuable content from www.longtermcare.gov.  

Contact Us to discuss long term care more in depth and possibly develop a strategy to help cover this potential risk, we are proud to work in communities like Charlotte, Hickory, Concord, Greensboro, Rock Hill, Salisbury, Gastonia, Spartanburg, Greenville and Asheville, North Carolina.


This material is for informational purposes only and is not affiliated with the U.S. government or any governmental agency. It is not intended to provide any tax, legal or investment advice or provide the basis for any financial decisions. Please consult a qualified professional before making decisions about your financial situation.
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