Planning Couple

Alternative Long Term Care Planning Strategies

Long-term care is one risk with many solutions. Companies keep developing new products and planning strategies to address the needs of consumers. Long-term care insurance is only one strategy to protect your future.


Let’s say that you have been thinking about purchasing LTCI for quite some time, but you keep hesitating because what if you never use the policy? (Wouldn’t that be the best thing that could ever happen?) Why “waste” all those premium dollars?

Numerous carriers provide life insurance with LTC riders. This is a single strategy that plans for two financial risks: premature death and LTC expenses.

The life insurance portion of the policy is generally permanent guaranteed universal life or whole life. If you become ill, you can accelerate the death benefit to pay for LTC, and you also have the ability to add a rider to leverage the death benefit to about three times the original amount. You can use the entire death benefit or a portion of it to pay for LTC expenses. Ay unused portion is paid to your beneficiaries. If you never need LTC, the entire death benefit is paid to your heirs tax-free.

The LTC portion of the policy provides comprehensive coverage in the setting of your choice. All levels of home care (skilled and custodial), adult day care, assisted living, nursing home care and hospice are covered.

The life insurance carriers offering hybrid polices may or may not offer inflation protection. This means that if you need care in the future, you will pay more out of pocket. The way to compensate for the lack of inflation protection is to purchase a higher death benefit which will increase your monthly payment for LTC expenses.

If life insurance carriers feature inflation protection in their hybrid policies, it is generally 3% simple and/or 5% compound.

There is a company that will even pay cash so that anyone can take care of you, and requires no submission of receipts!

These policies require two sets of underwriting – one for life and one for LTC. You have to be insurable for both.

Generally, to fund the policy, you need a single lump-sum payment or a payment over 5, 7, or 10 years. Few companies offer an annual premium payment.

If you have a life insurance policy with some cash build-up consider replacing it with a life insurance policy with LTC rider.

If you have received an inheritance OR have funds sitting in a CD or money market account, consider a life insurance policy with LTC rider.

This policy is usually permanent universal life. You can accelerate the death benefit to pay for your LTC. It only requires one set of underwriting for life. It is an excellent strategy for anyone not eligible for standalone LTCI or a hybrid.

These policies are not as robust as a traditional or NYS partnership plan. An individual selects the pool of money they would like to have for LTC. The pool of money provides a set monthly benefit over a one to two year timeframe.


What happens if you can’t afford a long-term care insurance premium or are uninsurable? A life settlement may be an option for you.

A life settlement is the sale of an in-force life insurance policy by its owner to a financial institution as the provider. The policy owner receives a cash settlement offer higher than the cash surrender value but less than the death benefit, and all ownership rights and obligations of the policy are transferred to the provider.

Certain circumstances make this a good planning tool: if you have a life insurance policy that is about to lapse or is no longer necessary due to changes in your estate; if you need more discretionary income to maintain your lifestyle or purchase long-term care insurance; or if you have been diagnosed with an ailment that makes you uninsurable for long-term care insurance and you need funds to pay for home or facility care.


The long-term care planning market continues to evolve with new products and features that accommodate all ages, preferences and lifestyles. There is no reason not to plan for long-term care. The economy might be unstable but you can bring some certainty and control into your future. Call us today at 800-422-2655 for a free consultation.

"I wanted to take this opportunity to thank you for your time and hard work in helping us obtain long term health insurance. You are a true professional in every sense of the word. It was a pleasure working with you and learning about a very complex subject."
VR- Rochester, NY