Shopping Cart
Your Cart is Empty
There was an error with PayPalClick here to try again
CelebrateThank you for your business!You should be receiving an order confirmation from Paypal shortly.Exit Shopping Cart

Becker & Associates



Get a "Two-for"- Life Insurance with Long Term Care

Posted on July 17, 2015 at 4:25 PM

Using your Life Insurance for Long Term Care Expense:

Life Insurance policies are ever changing to meet the needs of our ever changing society.  All the buzz is now on Long Term Care coverage, but if you've ever gotten a quote you know it is not cheap!  Also, what if you never need it?  Once you've paid the premium to the carrier for a Long term Care policy, it's GONE and you have nothing to show for it.  Though there are benefits to having a comprehensive LTC (Long Term Care) can spell out the benefits in a more precise way, add on riders for COLA (Cost of Living Adjustments), etc, but the fact remains that it's expensive and if you never use it, it's money down the drain. 

Do not mistake my message to mean LTC is not important!  It is VERY fact more important than ever, there are just more creative ways of getting it these days. 

Using a Life Insurance policy with a guaranteed Death benefit and adding a 4% LTC rider is a very interesting solution.  Let's use this example:  You are healthy enough to purchase a $500,000. face amount and you become ill enough or have an accident and meet the requirement to be able to tap into your policy for its LTC benefits (the requirement for ALL LTC policies is just about the same, whether a policy or a rider) is being unable to do at least 2 of the ADLs - Activities of Daily Living).  Using a $500,000. Death Benefit policy with the LTC rider of 4% per month = $20,000. per month available to you.  

Per the IRS, at this time the maximum amount you may receive from your policy on a tax free basis is $330 per day or $9.900. per month.  This is because the LTC benefit is essentially considered getting your Death benefit early.  Depending on your needs, whether it be paying for a facility, paying for homecare, paying a relative to take care of you, you may decide to take only the tax free portion from your policy, but the full 4% is still available. 

Then let's say you get better and return to life as normal in 6 months, you have taken or "used" (at $9,900. mo.) $59,400.00 of your Death Benefit thus reducing your policy's Death benefit to $440,600.  This amount will be passed on to your heirs tax free OR be available for another round of LTC usage.

If you are 70 1/2 years old and are receiving "RMD"s (Required Minimum Distributions) from retirement funds that you don't really need, you can turn taxable income into tax free money using this strategy!

In summary, you've used tax free death benefits to pay for your Long Term Care needs and the money you've invested in your Life insurance is still there! 

Example - A $500,000. Policy would cover the IRS maximum monthly LTC payment of $9,900. for 4.2 YEARS!

Some Statistics for the USA:  For someone with a 90-day Elimination Period, the lifetime chance of someone buying coverage at age 60 and using policy benefits was 35%. So, 35% will use their coverage and 65% will not. As you might assume, the decline is because during those first 90 days, some people will recover and some will die.

Here is some meaningful information on nursing home lengths of stays as published in the Association's 2008 LTCi Sourcebook. Remember, that most long-term care is actually received at home but there are still fewer statistics about home care utilization for "long-term care" needs. When we get relevant ones we will publish them for consumers to read.  Notice that the length of time that anyone stays in a Nursing Home is well under five years!  We must consider the time that most people need in home care too, please see "Long Term Care Info & Statistics" blog for more info.

Average Length of Stays (Nursing Homes)

5 years or more - 12.0%

3 to 5 years - 12.0%

1 to 3 years - 30.3%

6 to 12 months - 14.2%

3 to 6 months - 10.0%

Less than 3 months  - 20.0%

Average Length of Stay in Years

Female - 2.6 years

Male - 2.3 years

Married - 1.6 years

Single / Never Married - 3.8 years

Widowed - 2.3 years

Divorced / Separated - 2.7 years

Categories: Life,Death and Illness & Injuries Happen, Be Ready!, Life Insurance-Long Term Care included! Any Age

Post a Comment


Oops, you forgot something.


The words you entered did not match the given text. Please try again.


Reply CarlPew
10:14 AM on June 16, 2021 
cialis for daily use price canadian mail order pharmacy lasix price india ipledge accutane reliable rx pharmacy
Reply Kiabinly
9:15 AM on June 16, 2021 
Reply Payday Loan
6:25 AM on June 16, 2021 
america loan
Reply Getting A Loan
5:10 AM on June 16, 2021 
debt consolidation advice advance payday loans
Reply Lisabinly
3:43 AM on June 16, 2021 
canada viagra otc
Reply Lisabinly
2:54 AM on June 16, 2021 
female version of viagra
Reply JudyPew
2:53 AM on June 16, 2021 
sildenafil 1 cream tadalafil gel gabapentin for sale cheap where can i buy otc furosemide female viagra tablets price in india tadalafil 10 mg where can you buy cialis cheap lisinopril average cost fluoxetine 40mg tablets for sale cialis price south africa
Reply stephenemay
7:38 PM on June 15, 2021 
nike free 5.0 navy blue and orange billig jordan 9 blue black jordan 11 university red white miami dolphins titleist hat 626 asics mens dynaflyte 2 running shoes billig wholesale nike hyperdunk 2015 black blue brown
Reply rodmanusa
7:23 PM on June 15, 2021 
oxo night dresses uk grey shoes nike zoom winflo 2 eva lendel wedding dresses floral dress with split kith long sleeve womens nike denver broncos 99 kevin vickerson elite white nfl jersey sale
Reply Online Payday Loan
6:08 PM on June 15, 2021 
loan bad credit best debt consolidation loans
Reply acoulen
3:40 PM on June 15, 2021 
adidas yeezy 750 boost 2 billig nike dunk sb heels low white black pink clearance for cheap billig nike pg1 shining dragon san jose sharks beanie for eu nike mercurial victory womens all gold billig nike air force 1 star wars wallpaper
Reply Kiabinly
2:28 PM on June 15, 2021 
brand cialis 100mg
Reply Best Payday Loan
10:25 AM on June 15, 2021 
loans unsecured
Reply Direct Lenders
10:03 AM on June 15, 2021 
applying for a loan
Reply bocksberg
9:00 AM on June 15, 2021 
black and gold womens air max 2014 shoes spain adidas nmd r1 singapore sale nike hyperdunk 2017 low flyknit air jordan 6 low gold and red cheap all red nike air max 1 what the 36 46 billig adidas yeezy 500 sizing 3ds
Reply Amybinly
5:27 AM on June 15, 2021 
buy viagra soft online
Reply Direct Lenders
2:17 AM on June 15, 2021 
instant payday
Reply turfflags
1:49 AM on June 15, 2021 
black and gold womens air max 2014 shoes spain adidas nmd r1 singapore sale nike hyperdunk 2017 low flyknit air jordan 6 low gold and red cheap all red nike air max 1 what the 36 46 billig adidas yeezy 500 sizing 3ds
Reply fibuilders
12:15 AM on June 15, 2021 
new white nike soccer cleats for cheap billig jordan trainer pro canada billig minnesota twins baseball hat for uk powder blue jordan 1 noir nike air max 270 black white yellow shoes billig adidas yeezy boost 750 triple negative billig
Reply Online Payday Loan
10:33 PM on June 14, 2021 
loan type