There are many ways that long term care can be paid for, depending on the individual’s medical and
financial circumstances and what planning was put into place prior to the need for care.
To name several:
- Traditional long-term care insurance
- Hybrid long-term care insurance built upon a whole or universal life framework
- Hybrid long-term care insurance built upon an annuity framework and funded with qualified
- Accelerated life insurance benefits
- Selling life insurance death benefit at a discount to make cash available to pay for care
- Reverse mortgage
- Veteran’s benefits
- Medicaid benefits
It’s unlikely that all of the options on this list would be good for everyone. For example, a long-term
care insurance policy may be the option of choice philosophically, but not possible due to pre-existing
conditions or cost. For another example, Medicaid can be an excellent and very generous form of
comprehensive long-term care financing. However, the eligibility requirements may exclude some, and
often involves complicated planning.
If your instinct is to stick your head in the sand and hope you never need long term care, statistics show
that you will be on the losing end of that plan. Instead, follow these steps to constructive decision
making about your future long-term care:
- Discuss the risks with your physician.
- Educate yourself on long-term care.
- Get started on, or update, your existing estate planning. Be sure that your elder law attorney, and
financial and tax advisors work collaboratively to assure complete and accurate summary of your
financial assets. The estate plan should include recommendations on long-term care financing options
that are suitable for you.
- Work collaboratively with your legal and financial team to effectuate the option(s) that are most likely
to achieve your long-term care financing goals.
- Update your plan periodically to assure that the plan still satisfies your goals.
If protecting your assets from long-term care costs is something you are interested in, start planning
sooner rather than later. You, and your family, will be glad you did.