What Is the Best Way to Pay for Long-Term Care?
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What’s the “best” way to pay for long-term care expenses? The answer is highly personal, depending on your unique financial situation and individual needs. Regardless of your stage in life, it’s important to have a plan for this potentially significant healthcare cost.
In this week’s Money Wisdom Question Series, Ian Fergusson, RICP® explores three different ways you could fund your long-term care needs.
Traditional Long-Term Care Insurance
A well-known vehicle for covering this type of expense is traditional long-term care insurance. This type of policy is similar to car insurance. You pay a monthly premium, and if you need the care, the policy helps cover the costs. However, these plans are “use it or lose it,” which means you could end up paying premiums without ever using the benefits.
Hybrid Long-Term Care/Life Insurance
Hybrid long-term care insurance plans paired with a life insurance policy have been gaining popularity in recent years. The benefit of this approach is that if you don’t need care, the premiums can go to your beneficiaries as a death benefit. While this option is generally more expensive, it’s worth considering as a more flexible approach to planning.
Self-Insurance
A third option is to self-fund for future long-term care costs. This means evaluating whether you have enough savings and financial flexibility to pay for these expenses out of pocket. If you don’t end up needing care, those savings will still be available for future generations.
Ultimately, whichever insurance you choose, it’s crucial to have a plan in place before your choices become limited. Talking with a financial advisor now can help you prepare for potential financial challenges down the road.
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Information presented here is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
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