Most of us who are in our 50’s or older have probably looked at or at least thought about purchasing Long Term Care Insurance, or we are aware of it because our parents who are probably in their 70’s or later have already bought a policy. If you have looked at Long Term Care Insurance at all, you probably have seen the traditional, health insurance based approach that your parents purchased. Well…there is another approach called Asset Based Long Term Care which is definitely NOT your parent’s type of LTC coverage.
Asset Based Long Term Care (ABLTC) has been around for about 26 years or so and has evolved into a variety of choices that will protect your assets and income against Long Term Care costs but will pass on any unused benefits to your heirs. In many cases, Income Tax Free! They also have the added advantage of guaranteed rates. You will never receive a premium rate increase…EVER! ABLTC uses a Life Insurance or Annuity chassis instead of
the older, health insurance type chassis that is normally a USE IT or LOSE IT type approach and will normally have multiple rate increases over time. ABLTC is WIN-WIN.
From the Single Premium Life Insurance based product of the late 1980’s, the products have evolved enough that there are now many choices. The life insurance based products can be purchased with a single premium or on a pay as you go type approach. The single premium products can be funded with just about any source of funds including Cash, CD’s, Money Market funds, old cash value life insurance policies (through a tax-free exchange), old annuities (again… a tax-free exchange) and even IRA and 401k type funds. The pay as you go plans can be paid up in as short as 10 years or have ongoing premium options. Your choice.
The advantages I see in ABLTC type of policies are (1) Cash Value growth that can be accessed in a variety of ways. (2) Tax-Deferred growth of funds within the policies. (3) Tax-Free withdrawal of funds for Long Term Care in most cases. (4) A great way to leverage your assets into more Long Term Care benefits. (5) Never having to worry about a rate increase down the road that will make the policy unaffordable that sometimes happens with health insurance based plans. (6) The greatest advantage I see is that these type of policies pay Long Term Care benefits if you need them but will also pass on unused benefits to your heirs. Long Term Care benefits is defined as Nursing Home, Home Health Care, Assisted Living Facilities or Adult Day Care.
ABLTC policies cover the same benefits and use the same definitions and “triggers” for claims as health based Long Term Care plans but as you can see, they are much more appealing to most consumers because of the WIN-WIN based approach. They can even be combined with a traditional health based plan to either supplement benefits for a small plan or to reduce premiums and cost on a health based plan that has taken rate increases and needs to be reduced in benefits.
Please feel free to contact me about these ideas and to see if we can find a plan that fits your situation and budget. We can discuss over the phone (309-297-0296), by email (email@example.com) or face to face. No rush and no pressure from my end. Hope to talk to you soon!