TC Awareness Month is around the corner, starting Nov. 1. HOWEVER, before then, we will look at some of the many questions that surround LTC coverage and the key benefits it brings, starting with one of the most frequently asked – WHAT IS THE BEST WAY TO PAY FOR LTC?
There are three ways to pay for LTC and all ways are NOT created equal. Hint: there is one option that stands above the others…
Dollar For Dollar
The approach of “self-insuring” through existing liquidity is one way to pay for long-term care – meaning your client uses his or her savings/assets to pay out-of-pocket for care expenses as they arise.
This is a Dollar-for-Dollar approach, at best, as it correspondingly prevents the opportunity to further earn dividends or interest on those funds. Not ideal.
More Than Dollar For Dollar
Without the proper liquidity (or other coverage), your client will need to sell assets or take out a loan to pay for long-term care.
One of many potential issues with this is the fact that the timing of the need for care is unpredictable, meaning that those assets, based on when the care need arises, can be up or down in value (and so can the interest rate associated with a loan). Not ideal.
Pennies For Dollar
Purchasing proper long-term care insurance allows your client to have coverage for pennies on the dollar, compared to the true cost of the care, whether at home or in a community. This also allows the client to maximize the investment by maintaining control of all other assets. Ideal.
Want to learn more? Our team at LIS Group is always available to discuss the best path for you and your clients – 704.927.0101