Paying for Long Term Care

As we age, so does the likelihood of needing long-term care.

Nearly 70% of individuals over age 65 will need some form of long-term care before they die.  Therefore, we know these expenses are coming, so we must ask ourselves, what’s the best way to pay for long term care?


Insurance Products Should Be Your First Choice

The purpose of any insurance product is to protect against financial loss. Therefore, if financial hardship is likely to fall upon you in the future, investing in an insurance policy is a wise decision.

Consider this; no one has ever regretted owning an insurance policy when facing a financial hardship that that policy protects against.

Before exploring the different ways of paying for long term care, it’s essential to know the different types of insurance products available that give long term care protection

Three types of insurance products that can help pay for long term care

Long term care insurance – traditional LTC policies protect against both in-patient care and at-home personal care. These policies supply a daily payout value for a set number of years.

Life Insurance with LTC Rider – most insurance companies provide an option to add a long-term care rider to an existing or new life insurance policy.  The LTC rider activates if you cannot perform two out of the six daily living activities: eating, bathing, toileting, dressing, mobility, and continence. If activated, the rider supplies a daily dollar amount to help pay for long term medical care.  Additionally, if you never use the long term care rider, then the policy returns a death benefit to your beneficiary.

Annuity with LTC Rider – as with life insurance policies, you can also add a LTC rider to most annuity investments. The rider works in the same manner and provides a daily payout once activated.

Depending on your age, health, and life circumstances, one of these products will fit better than the others.  Our friendly agents are here to help you explore these options so you can make an informed financial decision.

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Six Ways to Pay For Long Term Care Without a LTC Insurance Policy

This is not an exhausted list, and there may be other alternatives to paying for long-term care.

Self Fund

We all know that paying for long-term care out-of-pocket can be incredibly expensive.  Although true, cash flowing your long term medical care is possible with the proper planning and financial discipline.  It may be surprising to hear, but most middle-class Americans have the financial means to cash flow their LTC; the only thing they’re missing is a plan.

Adding a LTC Rider To Life Insurance Policy or Annuity

As discussed above, adding a long-term care rider is one of the best ways of paying for long-term care.  If you already own a life insurance policy or an annuity investment, we strongly suggest exploring this option before looking elsewhere.  If you don’t already own one of these products, one of our independent agents can help you shop and compare your options from all the top insurance providers.

Government Benefits

It’s a common misconception that the government pays for long term care costs through Medicare.  The truth is that Medicare only pays a very small amount towards long term care costs.

Medicare Part A covers up to 100 days of inpatient care within a hospital, nursing home, or treatment center.  Once you exhaust these benefits, you’ll be left responsible for the full costs on your own. Additionally, Medicare does not supply any benefits for at-home personal care, which is the most common type of long term care. Therefore, Medicare should not be your only form of long term care protection.

Those who qualify for Medicaid are eligible for long term care coverage; however, you’ll be forced to sell all of your assets worth over $2,000 before the government pays for long term care expenses.  Although Medicaid does provide long term care coverage, this is a place that no one truly wants to be.

Life Settlement

Did you know that most life insurance policies can be sold or stashed in for a lump sum? Its’ true and is known as a life settlement.

It may be wise for some people to purchase a new life insurance policy; for others, it may be best to exchange your old policy for a lump-sum life settlement. It all depends on your life circumstances. Each situation is unique, which is why it’s best to work with an independent agent to explore and assess all available options.

Reverse Mortgage

For specific individuals, a reverse mortgage may be a suitable option for paying for long term care expenses.  

Millions of American’s own homes with untapped equity.  If needed, you can access that equity through a reverse mortgage and establish an income stream to help pay for ongoing medical costs.

Many individuals are surprised by how much income they can receive through a reverse mortgage.  If you’re interested in exploring this option, fill out the form on your screen to get in touch with our office.  Our helpful agents provide a free referral service to the top reverse mortgage companies across the country.

Reach Out For Generosity

If you’ve exhausted your alternative for funding long term care, you may be forced to rely on the goodwill of others.  While it may be tough to ask, you never know how generous people can be when someone they love is suffering. The most challenging part may be asking with humility and honesty about your situation.

How Should You Pay For Your Long Term Care?

The answer to this question is ultimately up to you.  Above we briefly explored six options for paying for long-term care without a long-term care insurance policy.  The best option for you depends on your life circumstances.  We strongly suggest working with one of our independent agents to help you explore these options as well as to shop and compare traditional long term care insurance coverage.

We provide free advice, support, and help in finding the best insurance coverage available.  See why thousands of people have trusted us to help protect their finances and live a successful retirement.

Explore your options today by filling out the form on your screen.

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