In my previous articles, I have been trying to communicate the need to take long term care funding seriously. Now I will list the various methods for funding.
- Write a check... every month... for an unlimited amount for an unlimited amount of time. This is called self-insuring.
- Spend almost all assets on caregivers, therefore, qualifying for government assistance - known as Medicaid.
- Purchase a traditional insurance policy, but they have largely become expensive and obsolete.
- Consider re-positioning an existing annuity or insurance policy to add long term care coverage.
- Purchase an annuity with some long term care coverage.
- Purchase a life insurance policy with some long term care coverage.
- Purchase a hybrid product which will return some kind of benefit - a death benefit, long term care benefit, or cash value.
- Rarely, consider a reverse mortgage. It's not my favorite option but does work in specific situations.
The top three choices are those most familiar. Options four through seven might contain some attractive choices unknown to many financial planning clients and, at times, involve repositioning existing assets that could be put to a better use.
To understand which option is best for you, we should talk. And stay tuned for my next article.