Updated Saturday, September 20, 2014 as of 12:01 PM ET

Self-Insuring for Long-Term Care

For retired clients looking to conserve their assets while still protecting themselves against the costs of a medical crisis, long-term care insurance isnít always the best option. A significant swath of these clients may be better off self-insuring.

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Comments (5)
Why would you self insure when the carriers can provide excellent leverage on your assets without a use it or loose it provision of a traditional LTCi product. The new hybrid products are excellent for asset protection against the high price of LTC without many of the downsides of a traditional products.
Posted by Keith F | Monday, September 23 2013 at 1:40PM ET
Long Term Care is expensive pure and simple. The cost of Long Term Care Insurance has steadily increased since my wife and I bought our policy back in 2001. We purchased a ten pay policy and over the ten year period of time we paid $39,000 in premiums. We started with $165.00 per day of coverage with compound inflation protection at 5% with a comprehensive plan with lifetime benefits for both my wife and me. Since that time insurance premiums have increased probably due to utilization of coverage. We currently have approximately $9,000. per month of benefits each and we hope not to ever use it. We felt the cost was worth the protection at the time. I see more and more individuals needing assistance as they go through the golden age of their lives and also see many do not have family members to assist them. I suppose to self insure would be a good idea for those with abundance and the excess would just complicate an estate with additional taxes at death. I expect over time the Long Term Care industry will continue to grow and be prosperous over time.
Posted by Gary R | Monday, September 23 2013 at 1:47PM ET
I agree with Keith. The hybrids give you something LTCi doesn't - cost containment! Plus, a residual value for your heirs or estate.

The problem is there are not enough beds versus the aging baby boomers. A long-term care plan will be your bargaining chip for a bed.
Posted by Robert K | Monday, September 23 2013 at 2:37PM ET
Remember the benefits of Partnership for those states that offer it. Even a small LTCI can assure some assets can be transferred to family members or charity without jeopardizing Medicaid eligiblilty.
Posted by Richard S | Monday, September 23 2013 at 2:39PM ET
Bad planning idea. With that kind of new worth, buy the life insurance with the LTC rider. leave life insurance proceeds as legacy rather than or in addition to other assets.
Posted by Brad R | Monday, September 23 2013 at 3:28PM ET
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