When it comes to planning for the future and protecting your retirement from one of the greatest financial risks you will face, the need for assistance with daily activities, there are a multitude of options in 2022. In this article we will focus on one of the first options to appear in the insurance world, traditional “stand-alone” (not linked with a life insurance or annuity product) long-term care insurance.
Traditional “stand-alone” long term care insurance is a valuable option for many consumers who want long term care protection, but do not want to tie up (potentially) tens of thousands of dollars one of the newer long term care products that incorporate long term care protection with life insurance or annuity. If your ultimate goal is to protect against the financial risk of an extended need for care, and that protection alone is the concern, you may not want to pay for additional life insurance or an annuity.
Some of the reasons to purchase traditional long term care insurance instead of one other types of long-term care insurance include:
- More affordable annual premiums than most other types of long-term care insurance.
- Tax-free benefits and tax-deductible premiums.
- Traditional long-term care insurance gives you the most leverage for every dollar (compared to other types of long-term care insurance).
- More options in terms of benefit length, inflation, and partner shared benefit riders to customize your coverage.
- Only traditional long-term care insurance offers the option to protect assets from Medicaid spend-down rules.
Of course, as with any insurance product, there are “pro’s” and “con’s” to be aware of. Some of the downsides to traditional long term care insurance are:
- Premiums are not guaranteed and will likely increase over time.
- Without an expensive “Return of Premium” rider, the policy is typically “use it or lose it”.
- It can be difficult to medically qualify for coverage.
With so many factors to consider, it is very important to work with a long-term care specialist to analyze your specific situation. Health, family history, finances, and your personal goals should all be considered prior to applying for any type of long-term care coverage.
With the Baby Boomers moving steadily towards the average age that long-term care services and support are needed, programs like Medicaid (which funds a large portion of all nursing home expenses), will be stretched incredibly thin. Protect yourself now, to retain your independence and have the option to receive care in your home, receive quality care, protect your assets, preserve your estate, and perhaps most importantly, protect your family from having to be your caregiver one day.
As you look forward and plan for the future, make sure you are providing yourself options in terms of where you will receive care, the quality of that care, and who will be your caregivers when that time comes. You’ve lived your life executing carefully thought-out plans to give yourself the greatest number of options in terms of where you will live, what you will drive, where your children are educated, and even where you can vacation. It is just as critical to plan in that same thoughtful way to ensure dignity and options for care during that equally as important time in your life. A long-term care specialist will know where to start.
Yours for Long-Term Care Solutions,
Director of Long Term Care Solutions
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Jean Ausman is not affiliated with United Planners. This article is provided as a courtesy for educational purposes only, may not reflect the views of United Planners, and it is not to be construed as specific advice for any individual.