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Three Alternatives To Long-Term Care Insurance

If you think paying a mortgage seems expensive, compare it to the cost of a stay in a nursing home, the median price of which is $6,000. for a private institution. Ideally, everyone would have their own long-term care insurance to help shoulder the burden of these costs. But long-term care insurance is beyond the means of many Americans. Furthermore, the policies are becoming harder to find, as insurers drop such policies in the face of rising costs. 

Reality check

Yes, it would be nice to believe that you'll stay healthy your entire life until the day you die peacefully in your sleep. But that's not the reality for most people. Assuming Medicare will take care of you is also not a winning strategy: Medicare doesn't pay for long-term care. 

Alternatives to costly premiums

If you're not in a position to pay the monthly premiums on a long-term care insurance policy, there are still some alternatives you may want to consider to protect yourself should you need long-term care. 

1. Living benefits. This is a hybrid life insurance/long-term care policy. In this case, you don't have to wait to die to collect benefits. If you suffer from a chronic, terminal or critical illness, you will have access to your policy funds to pay for the cost of care. 

2. Annuity options. After depositing a lump sum to initiate the annuity product, you can recoup a multiple of the amount deposited if you need the money for long-term care expenses. Annuities may also offer an income rider that will double the amount of guaranteed income distribution if you enter long-term care. 

3. Asset protection trusts. You determine how much of your assets you want to protect from long-term care costs and move them to a special trust. 

Most people don't like to think about needing long-term care. But putting off establishing this important financial pillar can spell disaster for you and your family should you or a loved one need to enter a nursing facility. The worst mistake you can make is to do nothing to plan for your potential future needs. Once it's too late, it's too late. The best time to plan for long-term care is before you need it. 

 

 

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