You are getting older.
Whether you notice an expanding waistline, a little patch of gray in your thinning hair, notice you don't remember things as easily as you used to, or have lost a bit of spring in your step, the fact is the same.
Age waits on nobody.
At some point, long-term care will become a real concern for you. Maybe as you care for an aging parent, you've already started to think about what life will look like for you when you'll need more helping hands around to help you through the day.
If your child or children are blessed with wealth and you have a good relationship, maybe you breathe a little easier knowing you will receive the best care.
If that relationship is not ideal and/or you don't foresee putting a financial burden on someone else to care for you, you need a plan.
That plan may exist in a solution which mixes long-term care with your life insurance policy.
There are a few flavors to this.
Accelerated Death Benefit
In the case you are diagnosed with a terminal or life-threatening illness, need care for an extended amount of time, or can't function on an everyday basis to care for yourself, the luxury of being able to access a sum of money to go towards those costs is within reach through an accelerated death benefit option on your life insurance policy which pays a certain percentage.
This usually comes at a higher premium cost and you'll want to consider the limitations on this type of policy.
Combination Life
This type of product guarantees a payout from either the death benefit or the long-term care portion of the policy. For that guarantee, these policies usually require a significant investment in the average neighborhood of $75,000 often paid in a hefty lump sum premium or several larger annual premiums.
Another thing to consider, if you pull on one of the policy and receive payouts for long-term care, it will have a corresponding effect of reducing the death benefit intended for those you have named as a beneficiary.
This type of product may not be right for you if you only need life insurance, i.e., term life insurance, and don't want a permanent life insurance policy.
Life Settlements
Life insurance policies can be sold by the policy holder at certain points in their life, usually when they reach the age of 65 or older.
This allows for a sale of the policy less than the death benefit but more than the cash surrender value. The owner of the policy will sell and receive a cash payment with the future remaining premium payments and rights to the death benefits transferring to the buyer of the policy.
This allows seniors access to cash to pay for the long-term care they may need if it makes sense for them to no longer need a payout of the death benefit as they originally intended.
While there may be benefits in this type of settlement, i.e., no health screening, this transaction may be taxable.
Viatical Settlements
Similar to a life settlement in theory, e.g., selling a policy for a certain cash value, a viatical settlement involves selling a life insurance policy to a third party in the event of a diagnosis of a terminal illness, with a life expectancy of two years.
A viatical company offers to pay a percentage of the death benefit to the policy owner in exchange for the transference of the ownership, responsibility to pay further premiums, and most importantly to them, the rights to receive the death benefit upon death of the previous owner.
While this settlement is tax-free, there are things to consider. The approval process for viatical companies can be stringent, and if approved, once the transference takes place, your heirs do not receive any of the death benefit.
Older and Wiser
We don't have to fear getting older, especially if we take the time now to plan. If long-term care is not on your mind now, you may want to begin thinking about it.
As an independent insurance agency, we're getting older too, but we are also in the business of helping people become wiser about their need for current and future protection, regardless of their stage of life.
We'll be glad to talk to you further about long term care and life insurance. Hopefully we can help put a little spring back in your step when it comes to protecting your loved ones and YOU.
