As you know, it's no walk in the park to qualify for long-term care insurance
. Truth be told, many of the clients who are interested often have too many health complications to qualify.
Even if your LTC, short-term care, or even life insurance with long-term care benefits options have all been exhausted, it’s still important to make sure you take care of your clients’ needs to the best of your abilities.
Advisors should be aware there is another option out there. There are annuities that provide long-term care benefits
if an emergency should occur. For example, if the client has an emergency fund set aside, moving a portion of it into an annuity with an LTC rider can provide up to three times that amount for long-term care. This allows them to free up the remainder. They still maintain control of their funds, but they now have much more financial flexibility.
Here is how it works.
The long-term care riders
The long-term care riders
each match the accumulation value of the annuity when benefits begin so the client may triple the funds available for qualified long-term care expenses.
By paying the first two years' benefits from the accumulation value of the annuity, the company assures benefits after a 90-day deductible period while allowing the policy owner the cost savings of a plan with a much longer waiting period. The company also makes the services of care advisors available so that a knowledgeable advocate can assist the policy owner in obtaining the most appropriate and best care with the available financial resources.
These riders pay to cover qualified long-term care services such as:
- home health care
- care planning
- caregiver training
- homemaker services
- hospice services
- maintenance or personal care services
- respite care
- assisted living facility care
- alternative care services
- nursing home care
- adult day care (50 percent of daily maximum)
Using an annuity with a long-term care rider provides many benefits, such as:
- Safety — Your annuity is free from market risks.
- Liquidity — Funds can be accessed easily and quickly with no or low withdrawal penalties.
- Tax advantaged growth — Interest grows on a tax-deferred basis which allows your funds to grow faster than those that are taxed annually.
- Death benefit — Paid directly to your named beneficiaries, by-passing probate.
- Long-term care benefits — For home health care, nursing home care and adult day care. Benefits increase as your annuity value increases.
So, the next time you go through the process and you have nowhere else to turn, before you give up, make sure you help your clients fulfill their needs by looking at an annuity with an LTC rider as an option.
Important note about taxes: These riders are intended to be qualified long-term care insurance contracts under Section 7702B(b) of the Internal Revenue Code.