Life Insurance, Estate Planning and Long-Term Care: Know Your Options

November 4, 2020

Given current tax laws, we find that fewer families are concerned about paying a large estate tax upon death. Because of this, the planning focus has shifted from estate tax planning to estate preservation.

The cost of long-term care is skyrocketing, and with people living longer, the cost of care can be a drain on family wealth and a burden on adult children. A private room in a nursing home facility is projected to cost more than $160,000 per year in 20 years, which has many individuals in their 50s and 60s very concerned.

The traditional Long-Term Care (LTC) Insurance policies that were available in the 1990s and 2000s did not have guaranteed premiums. Most people who bought these policies have seen premium increases of over 100 percent, which is why most insurance carriers have exited the long-term care market all together.

For those who are considering the purchase of LTC Insurance there are a few things to know. First, if you are considering a traditional LTC policy, be aware, premiums are not guaranteed and like their predecessor’s premiums can increase. Also, there is no return of premium or death benefit option. So, if you do not use the LTC benefit premiums spent will be lost.

The second thing to know is that there are alternatives to traditional Long-Term Care Insurance that offer rates guaranteed to never increase. One is Life Insurance with an LTC Rider. These are permanent Life Insurance policies that allow the insured to take an advance of the death benefit to pay for qualified Long-Term Care expenses. If the LTC benefit is not used the death benefit remains intact and is paid to the insured’s heirs.

Another alternative acts more like an annuity in that a lump sum is placed with an insurance carrier, in return the insured has a cash balance, a long-term care benefit and a death benefit that pays if the long-term care benefit is never used.

Many individuals who currently own cash value life insurance have found that repositioning their cash value into one of these hybrid products better fits their current planning objectives. They offer the flexibility to be used during life and efficiently transfer an asset to the insured’s heirs in the event LTC is never needed.

Click here to read full article via the Estate Planning Council of Cleveland’s “Bright Ideas in Estate Planning” on

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For more information, please visit our Oswald Life page or contact me direct:

Mario Mastroianni
Sales Executive


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