Long Term Care: Self Insure – And Shift Your Risk

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Man 1

As human beings, while endowed with powerful brains, we can often behave in irrational ways – not least when it comes to our health.

While there is ample evidence to correlate healthy eating and weight loss with improved health and extended life, many continue to practice some of the unhealthiest lifestyles,      believing nothing will adversely affect their health moving forward – until, of course, it’s too late.

The same applies to long term care.  Today, many people either refuse to think about the issue altogether, or they self-insure their risk by setting aside money for such eventualities. These are the most common reasons for their decision:

  • “I’m in good health and I feel good. Nothing will happen to me.”6436
  • “It’s a waste of money – I’ll never need this.”
  • “I could be investing the premium I would be paying and creating an income instead.”
  • “Why should I create surrender charges on money that is now liquid?”

But what if there was a solution out there that not only provided long term care insurance
but also REFUNDED the premiums if they were never used?

One such solution is Asset Based Long Term Care. When designed properly, Asset Based LTC seamlessly morphs into long term care insurance liquidity for medical services not covered properly by health  insurance contracts. If care is not needed in this lifetime, the premium  refund of all contributions comes back in the form of a TAX FREE death benefit to beneficiaries.

The beauty of this type solution is that it offers the flexibility of self-insurance, while transferring the risk on to an insurance company in the chance there is a long term care event.  The chart below shows how it works.

Asset Based LTC

In summary, for people who believe in self insuring their long term care risk, the investment value of the original premium is realized when the contributor needs care, not on an annual rate of return basis.

Since the return of the original premium comes back to the contributor without taxes – whether in life or death – it can be argued that the insured has entered into a form of self insurance for a future long term care event while transferring the risk of this occurrence to an insurance company.  Brilliant planning!!


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