IF YOU DON'T USE IT, YOU KEEP IT
LONG TERM CARE INSURANCE
Long Term Care Alternative Insurance solutions deliver benefits if you need them, and returns your premium if you don't. We work with individuals and families to help them preserve wealth and plan for the future, and our alternative long term care insurance options make clients whole 100% of the time.
It's hard to imagine needing long term care when we're healthy today, but 70% of American's age 65+ will require some form of long term care in the coming years. The biggest question is - how would that affect your family members both physically and financially?
We're a team of passionate long term care insurance experts, and we want to help educate people on what lies ahead as well as the best insurance options available to you. We have solutions that can be funded with either savings or retirement money, and will work with you to find a solution that best suits your needs.
See if you qualify and request an illustration for a single premium long term care annuity or hybrid life insurance policy.
Welcome to Long Term Care Alternative Insurance. Everyday 7,000 people turn 70 years old in the United States, and according to the U.S. department of Health and Human Services, 70% of those people will require some form of Long Term Care as they get older.
Long Term Care is often thought of as living in a nursing home, but in reality 70% of these claims start while people are living in their own home. The average amount of time people need Long Term Care is 5 years, and the average annual long term care cost is $100k, so imagine what 5 years looks like for expenses. With inflation to consider, 25 years from now you're looking at double those costs. So the biggest question is - how will that affect your family when you have these kinds of expenses?
Long Term Care Alternative Insurance is a team of experts, and we're here to help educate people about a newer alternative to traditional long term care insurance. The type of products we focus on are known as Single Premium Fixed Annuities with Long Term Care Riders, or Hybrid Long Term Care Life Insurance policies. 100% of clients are made whole 100% of the time, so it's a safe and guaranteed option you should consider. Self insuring is not a good option, and full coverage can be very expensive, so consider a coinsurance plan where you at least have some coverage available to you should you need it.
So what is Long Term Care Alternative Insurance, and why should you be considering it? Let’s get started by comparing it with traditional Long Term Care insurance, which requires that you start paying expensive monthly or annual premiums while you’re still healthy. Most people don’t start thinking about Long Term Care insurance until they’re nearing retirement age, and by that time it’s going to be pretty expensive. Insurance agents may have pushed the idea of locking in rates when you're young, but the truth is as LTC expenses increase your insurance rates are allowed to increase if you want to retain the same level of coverage. And no matter when you start paying, if you end up passing away before entering a long term care situation, all those premiums you paid were for nothing, or in other words if you don’t use it you lose it. Baby Boomers are flocking to these newer Long Term Care Alternative Insurance programs because they still offer a good amount of protection while addressing that main issue of using it or losing it.
The basics of the Long Term Care Alternative Insurance products start with how they are funded. The Insurance Policy is actually in the form of a Fixed Annuity or a Life Insurance policy that includes a Long Term Care Rider that offers you certain guarantees and provides benefits if you need them or returns your money if you don't. Just like any annuity, instead of paying a monthly or annual premium you make a large, one-time premium payment that meets both the minimum of $35k and equals the amount you're personally comfortable with for potential coverage. Assuming you’re healthy today and can qualify, if you do end up entering a Long Term Care situation in the future, the insurance company will either double or triple your principle investment to help cover your Long Term Care expenses. And the best part about it is that if you don’t end up needing Long Term Care coverage, you can either get your principle back after a surrender period, or you can leave the money to your beneficiaries. So if you don’t use it, you keep it.
Life insurance policies with long term care riders can be funded over several years if the lump sum option doesn't work for you. They have a death benefit, similar to the fixed annuity, and can be paid off within a few years ensuring ltc coverage without the ongoing premiums later in life.
To qualify for these products, you have to be between the ages of 50 and 85, and can't currently require long term care. Applications are fairly easy and don't require extensive underwriting. Questions can be answered over the phone.
The single premium annuity has a minimum investment of $35k, you’re expected to make a 1% return rate so it's better than having your money sit in a savings account, and there’s a 9 year surrender period. You can access 10% of your principle each year of the surrender period if you need the cash, but this of course will lower your coverage amounts if you enter a Long Term Care situation.
If and when you do enter a Long Term Care situation, the insurance company will initially make reimbursement payments using your principle balance as a tax free benefit. Once that money is spent, the insurance company will start reimbursing you with their money. If you end up passing away before your principle is spent, the remaining balance will go to your beneficiary, so even though you can’t take it with you, your loved ones can still take it with them.
Payments for Long term Care are made as a reimbursement, so you can have your care providers bill the insurance company directly, with payments made up to your monthly limit. If there's any remaining balance, that will be the patient's responsibility. Payments are made over a 6 year period, so depending on how much principle you put in to begin with will determine the amount in which you’re entitled to each month. In other words, investing $100k will pay out more per month than a $35k investment policy.
So what is Long Term Care and what happens if you don’t have any coverage when you enter a Long Term Care situation? For starters, Long Term Care is needed when you can no longer perform two Average Daily Living activities such as bathing, preparing food, toileting, moving around, continence, and dressing. When you’re unable to achieve two of these activities or more on your own, you really are no longer capable of living alone at this point and you’re going to need help. One option for help is that a family member will have to live with you and care for you 24 hours a day. This may mean getting you to the bathroom and onto the toilet, bathing you, preparing food for you, and even dressing you. These are challenging things for anyone, and may cause resentment among family members as they will have to completely uproot their lives to provide for you and do challenging tasks for you that will be frustrating for both parties.
What you and your family really need is some professional help, and that can come in the form of at-home care, home health aide, homemaker services, chore services, nurse and therapist, personal care, respite care, adult day care, assisted living facilities, bed reservation, nursing home facilities, or hospice care, and these options are expensive. Having at-home help can easily cost $70k per year to have someone there just 8 hours a day. Moving to an assisted living facility can easily cost $100k per year, and if you need help getting onto the toilet, then you’re looking at $150k - $180k per year for a comfortable facility. And how exactly can one pay for these high expenses when they’re on fixed income?
If you don’t have the cash or insurance to cover your expenses you may look to your children for financial support which is not likely to be well received. And if that’s not available then a lien will be put on your personal property, which means that when your family goes to inherit your estate and/or sell your home they will have to pay your medical bills first before they can collect their money. Sometimes they go after next of kin for payments as well. In other words your family is not going to escape not having to pay, so even though you might have had your heart set on getting that new Cadillac in retirement that costs $70k and that you’ll put 10k miles on it over 10 years, you’re likely to be much better off protecting yourself and your family with an investment in some Long Term Care coverage.
To learn more and see if you qualify, request an illustration or send us an email and we'll be in touch soon to help.
Long Term Care Alternative Insurance is part of an independent, comprehensive financial planning firm with over 20 years of experience. Our firm's three areas of focus are Wealth Management, Estate Planning, and Insurance. By being independent advisors, we have access to a wide variety of insurance and investment related products, allowing us to pick and choose which products are best for our clients, not necessarily which ones pay us the most. We think that single premium fixed annuities and life insurance policies with long term care benefit riders are great products, and we are not motivated to push these products by any organization or upper management structure. The more happy our clients are, the more referrals we get, so it's in our best interest to help you the best ways we can.
We became passionate about Long Term Care when our family members reached their mid 90s, were still healthy, but could no longer walk and take care of themselves or be independent, and they had no Long Term Care insurance coverage. A family member has had to live with them and dedicate all their time to caring for them, and they still had to hire someone to come to the house to help, which had to be paid for completely out of pocket. If he had at least some coinsurance, then we'd all feel comfortable hiring the help that he needs. We believe the long term care alternative insurance option to be the most fair and reasonable option when it comes to getting some long term care insurance.