Get Two or More Dollars in Value for Each Dollar
Economizer Red Zone Edition #3626
Before we get started to answer last week’s question about where does the IRA go. It goes into the wife’s estate and not to the kids. Leaving an IRA to the estate results in a bigger tax burden than needed. (more on that next week)
High on the list of scary events for many boomers are:
The dreaded dementia and related cognitive diagnosis. (Bruce Willis for example)
The need for Long Term Care
Pressure on family caregivers.
The damned cost to buy insurance and the increasing costs if purchased.
Way too many people think - that won’t happen to me. I can say with certainty that, based on my 43 years of experience dealing with people’s financial lives, that happens often. Sadly, some form of care is needed for many, especially a surviving spouse.
The cost for insurance that would pay for care, if needed, is very costly and the annual cost increases as you get older and becomes ridiculously expensive to maintain. This forces many people to drop the policy when the need becomes greatest- as we age.
For example, a couple at age 55 would pay an annual average cost of 5,000 to 8,000 annually to start for a basic policy with no inflation riders. Costs can double for this couple for higher end policies to start.
What if there is a way to protect yourself, your assets, leave something for the family and not be forced to give up policy after paying for many years due to affordability?
The are two ideas that fit the situation.
Asset-based Long-Term Care (LTC) Is a hybrid insurance strategy that combines long-term care coverage with a life insurance policy or annuity. Unlike traditional “use-it-or-lose all your premiums for traditional LTC insurance, these policies guarantee a benefit:
If you never need care, your heirs receive a tax-free death benefit
You can always access the policy’s cash value and it’s never locked away.
How It Works
Funding Strategy: Most policies are funded by “repositioning” existing assets or a lump-sum payment from savings.
Benefit Acceleration: If you require care you “accelerate” the death benefit or annual income to pay for home health care, assisted living, or nursing home costs.
Residual Value: If the full benefit isn’t used for care, the remaining portion is paid out to beneficiaries as a tax-free death benefit.
Guaranteed Payout: Eliminates the risk of “wasting” premiums if you stay healthy.
Tax Benefits used for qualified LTC expenses are generally tax-free.
There are ways to protect yourself by getting more value from every dollar that you have.
Steps to do today:
Or scan the code.
