Four Smart, Simple Ways to get Long Term Care Protection

Want to get Long Term Care protection but don’t want to buy a traditional, USE IT or LOSE IT type Long Term Care (LTC) health insurance plan?  What about if you could just take some of your existing assets and “reposition” them so that you didn’t have to worry about ongoing, increasing premiums and if you didn’t use the benefits…you could pass them on to your heirs.  Asset Based Long Term Care is an easy way to accomplish this goal.  Let me give you four quick examples of how that could be done.

Cash Value Life Insurance:  If you have some existing cash value life insurance, the IRS allows you to do what is called a “1035 tax-free exchange”.  This basically allows you to roll from one company to another without any taxation.  You can take that existing life insurance policy or policies and roll them into a Life Insurance Based LTC plan.  Not only will you still have the life insurance but now you also picked up some LTC benefits at no additional out of pocket cost.  It is a paid up life policy, so it will also eliminate any premiums you were still paying.  A couple items to be aware of…(1) has to be a “like to like” exchange.  Same person for both the old and new policy  (2)  any existing loans need to be paid off before the exchange  (3)  you may receive more of less death benefit on the exhange, so you need to keep that in mind when making the decision.  (4) In most cases you want to be out of surrender charges before you make the exchange.

Annuities:  If you have existing Annuities that are out of the surrender charge period, you can do the same type of “1035 tax-free exchange” as we did above.  The Pension Protection Act of 2006 provides Annuities that have certain wording to be used for LTC protection TAX FREE.  If you have an Annuity that you aren’t using for income that has a lot of gain that will eventually be taxable to either yourself or heirs…here is a way to still own an Annuity but be able to take all the funds out Income Tax Free if used for Long Term Care.  You just have to make sure it goes into an Annuity with the proper wording!

IRA’s/401k Funds:  This is a unique approach to LTC planning that most folks don’t know about.  If you have “Qualified” funds such as IRA’s, 401k’s, etc…you can use those funds for LTC protection.  It involves the use of an IRA Annuity and 20-Pay Whole life combination.  You will still have to pay your taxes on the IRA distributions over a 20 year period but by doing that, you will receive Long Term Care benefits, some extra Income Tax Free Life Insurance benefits, takes care of your Required Minimum Distributions (RMD’s) that you have to do anyway and it is a great Wealth Transfer Tool.  It will gradually move your assets from a   tax-deferred IRA to a tax-free Life Insurance policy over a period of 20 years.  This would be for funds you don’t need for day to day income.

CD’s/Money Market Funds:  Many of you will have funds stashed away in either CD’s or Money Market’s.  As you are well aware, these type of accounts are paying very, very little in the way of interest.  Most people have them in these accounts mainly for the safety and knowing the funds will be there when they need it.  These funds could be put into a Life Insurance based LTC product that has an UNLIMITED FREE LOOK provision.  If you change your mind for any reason at any time, you can pull your funds out and will be guaranteed to get back no less than what you put into it.  This would provide you with LTC protection, extra Life Insurance protection, access to your cash if need be and best of all, you always know you can get all your funds back.  Basically a very low risk appoach to LTC planning.  It is a WIN-WIN approach no matter which way you look at it.

Hope these ideas help you.  Please feel free to contact me at 309-297-0297 or email me at mwcaslin@msn.com for more information or to get some quotes based on your situation.  If you were referred to this site by another agent, please give them a call.

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“Put Silk on a Goat and it is still a Goat.”

Since we are getting close to St. Patricks Day and the Caslin’s have a lot of Irish blood running in their veins, I thought it was only appropriate that I look up some Irish sayings to use in my post this week.  I came up with what I hope are three good ones that will illustrate a couple of points that I try to make each time I do these articles.  The first one might get me in hot water with some folks but it sort of jumped off the page at me.

“Put silk on a goat and it is still a goat” to me means that every person, animal or item has a basic structure or meaning to it and you really can’t change that or hide it.  Even if you try to “dress it up”, it still is going to be the same as it was before.  How I saw this relating to Long Term Care was when we are talking about Health Insurance Based Long Term Care plans versus Asset Based Long Term Care.  A health insurance based LTC plan is HEALTH INSURANCE BASED!  This means that in most cases you will have to deal with premiums for the rest of your life, you will most likely have to contend with multiple rate increases over time and if you don’t use it, in most cases you lose it.  There is nothing financially to show for all the premiums you have paid over the years!  Is this bad?  Does it make this a bad choice?  I think that is something everyone has to decide for themselves.  Just like there is nothing wrong with a goat as long as you know you have a goat and not a sheep.

The second Irish saying is “You’ll never plow a field by turning it over in your mind.”  This basically means you won’t get anything done by just thinking about it… you have to get up and actually do something.  Many folks have looked and looked at Long Term Care Insurance and have never done anything about it.  From my experience, this may be because they haven’t found something they like.  Asset Based Long Term Care Insurance may be the answer.  It allows for either on-going premiums which are Guaranteed to never increase or by simply re-positioning existing assets such as CD’s, Annuities, old cash value Life Insurance and even IRA/401k type funds.  The biggest advantage I see is that it is WINWIN.  If you don’t use if for Long Term Care, or don’t use all of it, the remainder will pass on to your heirs… in many cases…Income Tax Free!

To sum this all up, we come to the last Irish saying which is “Postpone not a good action.”  If you see some action or item that looks right and fits your situation, there is really no reason to postpone acting on it.  Call me at 309-297-0296 or email me at mwcaslin@msn.com to discuss the ideas of Asset Based Long Term care and don’t postpone an action that would be good for yourself, your family and your heirs.  If you were referred to this site by another agent, please contact them for more information.

“Beannachtam na Feile Padraig!”  (Happy St. Patrick’s Day!)

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The “Silver Bullet” of Long Term Care Planning.

Ever wonder where the term “Silver Bullet” came from?  In today’s world it is commonly defined as an action which cuts through the complexity and provides an immediate solution to a problem.. A “failsafe solution” to a problem.  The allusion is to a miraculous fix that is otherwise portrayed as waving a magic wand.  This derives from the use of actual silver bullets and the widespread folk belief in earlier times that they were the only way of killing Werewolves and other supernatural beings.  This belief even goes back to ancient times and the belief of the magical power of silver.  In Orace’s “ODES”, the Delphic Oracle advised Philip of Macedonia to “fight with silver spears”.  So I guess the logical question is to see  if there is a “Silver Bullet” when it comes to Long Term Care Planning.

When I think about what that “Silver Bullet” would need to be, I can come up with a few items that would have to be included.  First… Rates that are guaranteed to never increase.  Second… If I didn’t use the benefits for Long Term Care, or didn’t use them all, I would want the benefits to be passed on to my heirs somehow.  Third… I would like to be earning interest on my premium dollars and have access to that money if I needed it.   Fourth…just for the heck of it, I’d like some extra tax advantages.  Sound like too much to ask for?  Not really.  This type of “Silver Bullet” plan already exists and has been around for about 25 years!

This type of plan is called “ASSET BASED LONG TERM CARE” or it is sometimes called a “Combo” plan or “Hybrid” plan.  The basic difference is that instead of using a health insurance chassis it uses either a life insurance or annuity chassis in providing the Long Term Care (LTC) benefits.  This allows for guaranteed rates, access to cash value, tax advantages and best of all… If you don’t use it-You don’t lose it.   The most common question I have received over the years is…”This makes so much sense…why doesn’t everyone do it this way?”  I still haven’t found the definitive answer but I think a lot of it has to do with how a company thinks and their experience with Life Insurance and Anuuity products.  The key is to find a company that has the experience with these types of products and believes in the concepts.  A couple companies that I work with have been doing these products for about 25 years each!

If you want to find a solution to your Long Term Care planning needs and you would like to look at a “Silver Bullet” solution, please give me a call at 309-297-0296 or email me at mwcaslin@msn.com.   You can also visit my website at caslinlongtermcare.com.  If you were referred to this site by another agent, please contact them for information.

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“WHAT IF?

We have all had situations in our life when we ask ourselves..What If?   What if I had taken that other job?  What if I had chosen a different career path?  What if  I had asked that girl/boy to dance?  What if I decided to this instead of that.  Life is full of choices and we are who we are today because of how we choose.  As we move on in life, there will continue to be those choices and they will influence how we  live and grow old.  One of the choices we will need to make is “how will I provide for my health care during my later years, specifically, how will I provide for Long Term Care.”

First off, let’s remember that Long Term Care is NOT just staying in a Nursing Home.  It includes Home Health Care, Assisted Living Facilities, Adult Day Care and the Nursing Home.  It is a range of choices that allows us to find the place that is most appropriate at that particular point in time.  By taking into account the type of care that is needed, finances and how much help we can expect from Family, Friends and the Community,  you can usually find a place that fits.  This is assuming you have a plan on how to pay for it.  I would like to throw out a few WHAT IF’s for you to consider.

What if  you could find a plan that guarantees no rate increases?

What If  you could earn interest on your premium dollars?

What if  you could receive benefits income tax free?

What if  you could simply reposition some existing assets?

What if  you didn’t use it that you didn’t lose it?

There are plans out there that will do all the above.  They are called “Asset Based” Long Term Care plans and have been around for about 25 years or so and seem to be “THE” place to go to look for alternative ideas for Long Term Care funding.  Whether you want to do a single pay approach by repositioning a CD, Annuity, Life Insurance policy or even IRA/401k type funds or a pay as you go type approach, the premiums are guaranteed never to increase.  The biggest advantage to these type of plans is that if you don’t use the benefits for Long Term Care (or don’t use all of them) they pass on to your heirs…in many cases…income tax free.  A real WIN-WIN type of approach vs the health insurance based approach which is USE IT or LOSE IT and has the possibility of numerous rate increases down the road.

Having been in the business for nearly 30 years, too many times I’ve heard from a customer that they wished they had done this type of approach or they wish they had known about this 10-15 years ago.  My suggestion is to take a look at this type of approach now so you don’t have to be worrying about asking yourself down the road… WHAT IF.  Feel free to give me a call at 309-297-0296 or email me at mwcaslin@msn.com.   You can also visit my website at www.caslinlongtermcare.com.   If you were referred to this site by another agent, please contact them for information on these products.  Feel free to leave comments or questions on this site.

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“All Aboard” for Long Term Care Planning

Have you ever had the chance to visit a model train show or exhibit and seen the well thought out plans and layouts?  They are a huge leap from watching the kid’s toy trains running around in circles under the Christmas tree!  The main difference is someone had a vision of what they wanted and came up with a plan on how to get there.

Having just got back into the hobby of model railroading, and having to start from scratch, the first thing one has to figure out is what is the vision.  Real trains don’t run around aimlessly in circles…they have someplace to go and a reason to get there.  Whether it is delivering goods or passengers, there was a plan laid out on how to accomplish that goal.  That is where I find myself at today, trying to figure out what this layout is going to look like and where are the trains going.  It can be a challenge to try to get all that in a small defined space!

When it comes to Long Term Care Planning, you also need a plan or vision on what you want to accomplish and how to get there.  “Running around in circles” is fun for the kids when they are young, but as we get older we need to figure out where we are now and where do we want to end up down the road.  I’ve found out over my nearly 30 years in the business that many people have not sat down and figured out a plan on what to do if they do need Long Term Care later in life.  It is a topic most people don’t like to think about or discuss, however, it is important to get this issue taken care of both for your own peace of mind and also for your family.  I believe the biggest objection most people have to Long Term Care planning is the belief that they won’t need care so if they go out and buy a Long Term Care health insurance policy, they are just wasting money.  There IS a solution that will take care of this issue!

Asset Based Long Term Care has been around for about 25 years and seems to be the “solution” that is now getting the most attention.  The reason for that is…IF YOU DON”T USE IT, YOU DON”T LOSE IT!” Asset Based Long Term Care (ABLTC) simply uses a life insurance or annuity chassis instead of a health insurance chassis.  This provides a WIN-WIN solution for LTC planning and guarantees no rate increases…EVER.  Payments can be single premium by using existing Annuities, existing Life Insurance, CD’s and even IRA’s and 401k money or they can be done on a pay as you go basis.  There are plans for just about anyone out there, including some options for someone already in a care situation.

So, if you feel like you have been running around in circles when it comes to Long Term Care planning, maybe it is time to get aboard the “Asset Based Long Term Care Express” and sit down and figure out how to get your plan laid out and give yourself and your family the peace of mind in knowing that this issue has been taken care of.  Please feel free to give me a call to discuss this or any issue in Long Term Care planning.  You can contact me at 309-297-0296 or email me at mwcaslin@msn.com.  If you were referred to this site by another agent, please give them a call.    Don’t let the train leave you at the station!

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The “Fiscal Cliff” of Long Term Care Planning

We have finally got thru what seemed like a years long election season and I think we were all hoping for a little peace and quite but now everything is focusing on the looming “Fiscal Cliff” and whether our folks in congress can get their act together enough to come up with some long term solutions.  Neither side wants to fall over the cliff with all the negative consequences that would entail both for individual taxpayers and the country as a whole.  What will probably happen is that we will get some type of minimal agreement and then “kick the can” down the road again for someone else to worry about.   Just as the government is dealing with this current crisis, we all have our own “Fiscal Cliff” we should be concerned with when it comes to Long Term Care planning.

The current issue within the Government is how do we pay for the services that are provided with the income that is received.  We will all have to deal with somewhat of a similiar issue when we get to the point of needing some type of Long Term Care whether that is Home Health Care, Assisted Living or Nursing Home Care.  How do we pay  for the services and care we need with the assets and income we have available?  Will we be forced into a situation like the Government is now facing where we have to settle for reduced services because we can’t afford the care?  With a little bit of thought and advance planning, we can all find a solution that will bypass any cliffs and avoid “kicking the can” down the road to our kids and grandkids.

One of the best solutions available today is what is called ASSET-BASED Long Term CARE.  This is simply using a Life Insurance based or Annuity based Long Term Care product instead of the more commonly known Health Insurance based LTC product.  Guaranteed Rates, Cash Value growth, Tax Advantages and knowing that someone, at some time, will get something out of the policy one way or another are some of the many advantages with this WIN-WIN type of approach.

Options to fund this type of policy can range from using existing cash value life insurance policies, annuities, IRA’s/401k’s or any type of cash account such as a CD or Money Market fund.  Pay as you go options are also available.  If you like the idea of a WIN-WIN type of approach over the USE IT or LOSE IT approach of health insurance based LTC, it would be worth your while to investigate this type of option.  These products will leverage your existing assets and provide a plan or path for your kids and grandkids to follow for your future care.

Please feel free to contact me at 309-297-0296 or email me at mwcaslin@msn.com  to discuss these ideas or any type of long term care planning.  If another agent referred you to this post, please contact them.

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Warning! Iceberg Ahead!

For anyone who has watched the movie, we all know the story of the “unsinkable” Titantic, which in the dead of night, plows into a large iceberg and tears open the side of the ship and eventually sinks with a large loss of life.  If you have ever read anything about icebergs, you’ll know that approximately 90% of the iceberg is hidden under the water.  That is why they are such a danger to shipping because many times you are seeing only the “tip of the iceberg”, you may not be seeing the whole picture.  There are two things we can learn about this story in regards to Long Term Care (LTC) planning:  (1) Look for the hidden issues below the surface and (2) prior planning can help minimize the damage when the unthinkable happens.

We all know about the high cost of LTC but what about the issues below the surface.  There are some important considerations besides money to think about when a loved one needs care.  (1)  Without some help, the spouse who is providing the care may end up in worse physical and mental  shape than the one receiving care due to the stress involved.     (2)  If the kids become involved in the caregiving, it usually isn’t shared equally amongst the adult children.  Oftentimes, one sibling (in many cases, the eldest daughter) bears the burden financially, emotionally and physically.  This can have a negative effect on the relationship with the other family members and even on the one needing care.  (3)  By not being prepared or having a plan in place, you may run into some unnecessary losses that could have been avoided.  Having to sell off some investments in a “down” market to provide funds for LTC would be one example.  Cashing out a CD, Annuity or Life Insurance policy that still had surrender charges would be another.

With some prior planning, some of these issues can be entirely avoided or at least minimized in some way or another.  By having some sort of LTC plan in place, there can be assistance in helping a spouse or child take care of the chronically ill individual.  This can help maintain a balanced family relationship and avoid undue physical and mental stress on the caregivers and hard feelings between siblings.  By simply re-positioning or re-designating some existing assets, the family may be able to avoid the need to sell or surrender  assets at the wrong time, leverage their dollars for care and pass on any unused benefits to the family… in many cases…Tax Free.

To discuss these ideas or Long Term Care planning issues in general, please give me a call at 309-297-0296 or email me at mwcaslin@msn.com.  If you were referred to this site by another agent, please give them a call.  Feel free to pass on this article to anyone who might be interested and feel free to encourage them to sign up on this site to get automatic updates in the future.

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