Need Long Term Care? Know your options

There has been a lot of talk lately about long-term care policies and the most economic way to purchase a long-term care insurance policy. One way that is garnering attention here in in Portland, Oregon and I’m sure other places through out the country is to add a ”Chronic Care” or “long-term care” rider to new whole life policy at the time of purchase. This adds flexibility to your coverage. For example, if you need help paying nursing home or other long-term care expenses, the policy’s death benefit can be withdrawn while you are living.

The benefits of this are that it would allow you to have a life insurance policy that will pay out when you die, but also give you access to that money prior to death for long-term care expenses. Many of these permanent life insurance policies have a 90 day wait period before they start making payments for expenses.

So let me provide two examples:

Juanita is 55 years old, single lives in Jacksonville, Florida and wants to provide for her long term care needs. In option one, she buys a long term care insurance policy that will cost her $200 per month and provide her with $250,000 in total coverage. The policy has a 60 day wait period before benefits begin to be paid.

In option two Juanita buys a long term insurance policy and spends $100 per month, but sets the benefits to start paying at one year and by doing so gets the same $250,000 in coverage. She then purchases a $50,000 permanent life insurance policy with a long term care rider with the remaining $100 per month. The chronic care payments on the life policy would start to pay out after 90 days.

The numbers here are just for example, but the point here of option two is that is if Juanita never needs her long term care insurance, the $100 she diverted to the whole life policy will pay out a death benefit to her heirs, allows Juanita access to her cash value of the policy if she needs it and still have similar, but not quite as good, long term care coverage.


Rodney Gilbert, CLTC, is a Registered Financial Representative and President of United Life Financial LLC. Rodney has been assisting his clients achieve their financial objectives since 2007. He holds Series 6 and Series 63 licenses and the Certification in Long Term Care (CLTC) Designation. Rodney is also an avid speaker to those who want to learn more about tax planning with IRAs. For additional information, visit http://www.unitedlifefinancial.net/


Remember, this blog is for information only and is not an offer to sell or invest in securities. Please refer to all appropriate prospectuses prior to any investment. Investments can, and do, lose money.