What is Asset-based Long-term Care?
No one wants to be unprepared for an unpredictable lifelong condition. As you get closer to the distribution stage of retirement planning, Asset-based Long-term Care (LTC) insurance may be a great option for you. Asset-based LTC takes a portion of your assets and repositions them without impacting your income. This can provide protection for the potential 20-30 years of retirement when life disruptions from long-term health conditions like Alzheimer’s or dementia can occur. It can also be an effective, tax-free method to pay for the entire length of your care. The long-term care under coverage may include:
- Adult daycare
- Home health care
- Assisted living
- Nursing home care
Benefits of Asset-based LTC
Asset-based LTC is an innovative combination of LTC insurance and whole-life insurance. This comes with a multitude of perks that can benefit the policyholder, such as:
- You can protect your assets from additional taxes with the potential security of a life insurance policy that grows at a minimum, tax-deferred interest rate.
- You can use this insurance during your lifetime to pay for care. If no care is needed, you may be able to access the cash value.
- If you pass away with an existing policy, this money can be distributed as a death benefit to whomever you choose, enabling you to leave a legacy for your loved ones.
- You can purchase Asset-based LTC as a single person or as a joint account, allowing you to share the benefits and be protected if both of you need care at the same time.
- You can choose whether you want protection for a specific number of months or your whole lifetime.
- You can prevent your loved ones from experiencing the emotional and financial stress of providing long-term care themselves.
How does Asset-based LTC work?
Asset-based LTC has many options based on your individual needs. You can purchase a base policy that has a cash lump sum, annual premiums, or cash value insurance funding options. If you desire even more coverage, an insurance rider is a helpful addition to an existing policy that may include continuation of benefits, less limited funding options, and cash single premiums or fixed annual premiums. You can fund your policy in a few different ways:
- With income from your portfolio that is not needed for retirement
- With an IRA
- With an annuity
Although many people feel they are healthy and don’t believe they’ll need long-term care, a survey says that 70% of people turning 65 today may need long-term care in the future. 20% of those will require care for longer than 5 years (Source). Asset-based LTC is a whole-life product that covers unpredictable lifelong conditions. With this option, you can have peace of mind that you and your loved ones are protected and taken care of.
Our advisors work to make sure you have a well-rounded financial plan that accounts for various life factors. For this reason, we know that Asset-based Long-term care insurance can be another valuable tool for your comprehensive financial plan.
Don’t wait. Call us to receive more information about Asset-based Long-term Care or schedule a one-on-one consultation with us. Click here to contact us now. Or click here to learn more about our Financial Planning and Investment services.
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Blog by Alex Kiritschenko, EA – Financial Advisor, Senior Tax Accountant
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.