Options for long-term care insurance
by Jane BouretteTraditional long-term care insurance
In some cases, this is the most effective solution. Today’s stronger policies may be structured to provide care in the home, an assisted living center or a nursing home. More cost-effective plans are available for couples in what’s called a “shared care” policy, as well. However, in many cases, this solution isn’t the most appropriate.
Life insurance with a long-term care option
There are several life insurance policies available today that provide an alternative long-term care rider in the event the need arises. For many people, this solution provides more peace of mind and often can be purchased using funds from an existing life insurance policy, depending on your age and health.
Medicaid-friendly annuities
Often, a person/couple is unable to afford long-term care insurance or care but doesn’t want to rely on Medicaid, for fear of losing what they do have left for their heirs.
In this case there are several alternative solutions to fund any potential long-term care needs. One might be to protect what assets are left using Medicaid-friendly annuities. These can provide income to the other spouse while care is being provided. They also protect the death benefit outside of probate for the heirs.
Reverse mortgages for long-term care insurance
Often, people do not want to leave or sell their home, and also want the option of leaving the home to the surviving spouse or heirs. Yet they want to protect themselves with privately funded coverage should the need arise. In this case, a reverse mortgage may provide enough income to fund a long-term care insurance policy.
Reverse mortgage for self-insuring
Sometimes, a reverse mortgage may provide enough income to supplement existing income while retired and healthy, yet be structured to leave enough to pay off the reverse mortgage once the owner leaves the home.
Self-insuring
Occasionally, a family has an estate with assets they wish to protect but do not want to take advantage of any of the above options. In these cases, you could insure yourself, while protecting the balance of your assets.
Originally published in the Sep/Oct 2006 issue of Cape Business.
Jane Bourette Jane Bourette is a financial adviser with the form of Drake, Saunders and Diwinsky, Ltd. 
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