There are two alternatives for using life insurance in place of traditional long term care insurance. These plans have great efficiencies because we can deal with the known (unfortunately that known is death) instead of the unknown (whether we will need long term care which is a coin flip).
The first and more common alternative is to use life insurance plans that grant the owner the ability to access the death benefit while alive for long term care expenses. There are several clear financial benefits to this type of plan. If you die without tapping the plan for long term care, you will leave a larger inheritance. If you do tap the plan for benefits while living, you will ultimately leave a larger inheritance than if you had spent down your assets. The plans are slightly more expensive than traditional long term care plans, but not much. For healthy people, these types of plans can be extremely efficient uses of resources to cover risk.
The second concept of using life insurance in place of long term care insurance generally only makes sense in the State of Wisconsin if your estate is valued at or approaching $675,000 for individuals or $1.3 million for couples. In such cases, a plan can be created using a trust, life insurance and gifting strategy that can reduce taxes and guarantee a minimum estate value. Because our methods are proprietary we do not disclose the entire concept here. We can provide recommendations for attorneys and accountants for you to work with, or work with your existing legal and accounting counsel.
There are of course many cases when traditional long term care insurance makes sense. We have over fifteen years of experience with long term care planning and are completely aware of the underwriting trends, industry history and current plans available. Please Contact me to discuss and compare all of your options.
