Broker Check
Long Term Care

Long Term Care

July 22, 2020

Did you know that 70% of adults 65 and older will require some level of long term care during their lifetime?

This major unknown can be concerning and many retirees fear the assets they have accumulated over their lifetime could all go to a nursing home, leaving nothing left for their loved ones. 

There are multiple ways to protect your assets from being depleted due to a nursing home stay. The three most common methods we implement for our clients are:

  1. Placing your assets into a trust
  2. Using traditional "Long Term Care Insurance"
  3. Utilizing a hybrid "Long Term Care" product 

If this is an topic you would like to discuss in more detail, we recommend scheduling a meeting with us to discuss your goals and determine which approach best meets your objectives.

Here is a brief explanation of the three methods mentioned above:  

There are several types of trusts you can utilize to protect assets. This approach provides protection of the assets from a nursing home once the assets have been in the trust for five years. At that point, the assets are no longer subject to the Medicaid look back period and are not accessible by the nursing home. Even if you or your spouse are already in a long term care facility it may not be too late to to implement this strategy. The main issue with this strategy for most individuals is the fact that the trust has to be irrevocable.     

Traditional LTC insurance
This solution can be customized to meet your specific coverage needs. You have the ability to select the monthly benefit, the duration of the benefit as well as many other options to meet your objectives. Traditional policies typically offer the most insurance protection against an extended nursing home stay. The main issue with this strategy for most is the cost for this type of coverage. Also, if you never have a long term care stay, the policy will end at your death and none of the premiums you paid will be refunded.   

Hybrid options
Hybrid Long Term Care products are typically a combination of long term care coverage with either life insurance or an annuity product as the underlying investment. Most of these policies will require premiums be paid in either a one-time payment or payments over a five-to-ten year period. Hybrid policies do not allow the same level of customization as traditional long term care coverage. However, unlike traditional policies, hybrid products will refund most or all of your premium paid if you do not use it. It also allows for you to cancel the policy in the future, should your situation change, and receive most or all of premiums paid.