Hybrid Long-Term Care Insurance Policies
by Trey Fairman - February 22, 2017
Trust Owned Life Insurance
As medicine has improved, we are all living longer. However, it's estimated
that over 70 percent of us age 65 or older can expect to need some assistance in
our golden years. This type of assistance is called long-term care, and
unfortunately, long-term care can be expensive. According to Genworth's annual
cost of care study, care in your home may cost over fifty thousand dollars
annually. A one-year stay in a nursing home averages more than ninety thousand
dollars. Depending on where you live, the cost of care can be much higher.
Genworth's research also shows the average length of care is about three years.
So, ninety thousand dollars times three years equals a two hundred and seventy
thousand dollar expense for long-term care.
How are people guarding against this risk and its impact on their savings?
Many are securing a new type of long-term care insurance. Previously, your only
option was a use it or lose it type policy. With those older policies, you got
nothing back if you were in the 30 percent that didn't need long-term care. It was
much like owning car insurance and not getting in a car accident - you don't get a
refund. But things have changed, and today clients are recycling old life insurance
policies, annuities, and even CDs into a hybrid long-term care policy. Think about
the insurance policies and annuities you have collected over the years. Do you
have them stuffed in a drawer or shoebox somewhere? Maybe you have a savings
account that just really isn't earning anything. Those assets can be upgraded tax-
free into a hybrid long-term care policy.
Here's how it works. We all know that life insurance companies pay the
benefit to your family once you're gone. Newer policies allow you to use the
insurance while you're alive tax-free to pay for long-term care. If you're lucky
enough to be in that 30 percent that doesn't need long-term care, the benefit is
still paid back to your loved one's income tax-free. Better policies even provide
you with a money-back guarantee if you change your mind.
Hybrid long-term care policies can be a safe and effective tool that (1) gives
you access to your money if you need it; (2) provides a tax-free benefit for long-term care; and (3) if you don't need long-term care, the benefit is still paid income
tax-free to your family.
Discover today how to protect yourself and your loved ones against long-
term care risks. It could be upgrading what you already own into a new policy or
cleaning out that old shoe box.