Long Term Care Health Insurance


Most people will require long term care in their lifetime.

The challenge is when and how  to get long term care insurance, and what is the best plan and the best way to pay for it.

Of course those decisions are unique to each individual and their financial situation.

Not every care funding option is applicable.

Long Term Care Health Insurance Options

  • Premium For Coverage:  As it sounds, you pay a premium for a daily benefit amount, have a waiting period before benefits are paid, and have the benefit for a specified time …usually 2 years to lifetime.
  • Suggested Length Of Benefit: The average length of time for a stay in a long term care facility is 2.7 years.  For this reason a 3 year or 4 year benefit period is recommended with the most important rider (extra for additional premium/cost) called ‘Restoration of Benefits’.
  • Restoration Of Benefits rider means that if you go into a long term care facility/nursing home and then recover and go home, your full ‘pool’ of money is restored.  Another feature to consider is Inflation Protection.
  • Inflation Protection increases your daily benefit (5% compound is ideal), while your premium remains fixed (unless all people covered receive a cost increase).

Protect Your Long Term Care Investment

Asset Based Protection:  This is the best route if you never need long term care, because you haven’t wasted any money and the asset passes to your heirs like your other investments.

There are currently two investments to accomplish this strategy.
  • Annuity Based
  • Life Insurance Based

The choice best for you depends on your financial objectives and strength of your portfolio situation.

  • Annuity Based Strategy: This strategy involves transferring a lump sum of money to an annuity from a CD, Savings, or other investment portfolio, to obtain the daily benefit ($200 per day currently in 2012) needed based on your age and the length of time you want your benefit (3 or 4 years).
  • Life Insurance Strategy:  With this strategy you can pay annually, for 10 or 20 years, or in a lump sum.  In addition to payment flexibility, the benefit that passes to the heirs is income tax free and can cover both spouses for the same amount of premium/cost.  Unique about this strategy is it can convert a fully taxable IRA to a tax free asset for the heirs, although taxes must still be paid on required minimum distributions.  In our opinion this is the very best way to erase the lump sum income tax due at death to the person who has the amount of money required to fund the plan and still pay their bills and retain their lifestyle.

Please contact your Assisted Living Services Of Florida advisor immediately to get FREE dedicated help for you and your loved one to get established in the most timely and efficient manner.