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LONG TERM CARE INSURANCE

Long term care is often the "missing link" of a solid retirement plan.  A 2017 Genworth study shows a median Virginia cost of long term care is between $45,000 - $95,000.  In addition to these high costs, 68% of persons over age 65 will fail in 2 activities of daily living or a cognitive impairment during their lifetime (AARP, Beyond 50:2003).  While long term care insurance is not necessarily suitable for households who will likely qualify for Medicaid (welfare) benefits do to lack of resources, the majority of middle-income and upper middle-income households are most vulnerable.  There are two primary types of insurance products that will offset the risk of long term care expenses; Traditional LTCi and Asset-based LTCi.  Read below to learn more about these two types of coverage to determine if it makes sense to request more information.

Traditional LTCi

Traditional LTCi generally provides coverage when you qualify for benefits through the disability of 2 or more activities of daily living or cognitive impairment.   Here are a few common benefits of most traditional LTCi policies, however individual contracts and benefits may vary:

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* Usually covers home care, assisted living & nursing home

* Benefit period in terms of years or pool-of-money

* Elimination period acts like a deductible - the longer the

   period, the more out-of-pocket exposure

* Inflation riders are available for additional cost

* Shared Care rider available at additional cost allows for 

   spouses to share the total benefit

* Typically a use-it or lose-it policy with no residual value upon

   death (some companies may offer return of premium rider

   for additional, but very expensive cost)

Asset-Based LTCi

Asset-based LTCi can be either a life insurance or annuity policy that allows for the death benefit to be accelerated to the owner if long term care is needed.  Some contracts have the option to extend LTC benefits beyond the death benefit at an additional cost.  Here are a few common benefits of asset-based LTCi policies, however individual contracts and benefits may vary:

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* Usually covers home care, assisted living & nursing home

* Benefit is accelerated monthly from death benefit

* Elimination period acts like a deductible - the longer the

   period, the more out-of-pocket exposure

* Inflation riders are available for additional cost

* Remaining death benefit is payable to beneficiary

* Certain policies allow for qualified funds (IRA, 401k, etc) to

    be used to fund premiums.

* Joint contracts available with certain companies

© 2018 by Creekside Insurance Advisors Inc.