Long-Term Care Planning Using Qualified Funds

Millions of Baby Boomers are now over the age of 65, with 10,000 more turning 65 every day, and most will require Long-Term Care (LTC) services as they age.....The only question is to what extent and how long.   With most LTCs excluded by Medicare, Medicare Supplements, or Health Insurance, your clients will need to pay for those expenses out-of-pocket as more than 80% of Americans lack a formal LTC Plan.  When those out-of-pocket costs exceed a client's liquidity, many will then begin tapping their largest asset - their retirement accounts - to cover those ongoing, Medicare-excluded healthcare expenses.

Given this scenario, perhaps it would be wise to help clients mitigate the risk of LTC by recommending they use a portion of the qualified funds and proactively implement an LTC Plan.  Additionally, for older clients yet to implement an LTC Plan, this strategy could be part of the retirement income and RMD planning.

Funding an LTC Plan with qualified funds can be advisor-controlled or implemented using a turnkey, carrier-designed solution.....to fund a Life/LTC Hybrid to enhance their risk mitigation profile.  Now may be a great time to show clients how they can:

• Protect themselves and potentially their spouse/partner from LTC risk with access to one pool of funds. 
• Provide significant LTC benefits, potentially for life, from a policy death benefit or a policy rider.
• Spread tax liabilities over time and potentially help meet required minimum distributions (RMDs). 
• If your client never needs LTC, a tax-free death benefit passes to their loved ones. 

We look forward to discussing clients who would benefit from this strategy.  

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¹ OneAmerica LTC Consumer Planning Study, conducted by Hanover Research, March 2022