Life Settlements, Viaticals and Long Term Care Benefit Plans

Many seniors over the age of 65 will eventually require some type of long term care. The need for long term care is usually due to a severe or chronic illness that requires both medical treatment and help with daily living. Paying for long term care can become a significant financial burden for an elder and his or her family – from $40,000 up to $100,000 a year depending on the type of care that is needed.

One way long term care can be financed is by converting a life insurance policy into a life settlement, viatical settlement or Long Term Care Benefit Plan.

Using Life Insurance to Pay for Long Term Care

Most insurance companies will buy back a policy if the policyholder decides it is no longer needed or can no longer afford the premiums. However, the amount of money the insurance company will pay (cash surrender value) is only a small percentage of the policy’s actual worth.

Another option is selling the life insurance policy to a third party. This is often the best way to recover the most amount of money from the policy and any premiums that have been paid to date.

Selling a Life Insurance Policy to a Third Party

When a life insurance policy is sold to a third party, it is called a life settlement. Until recently, life settlements were primarily for high net worth individuals with a death benefit above $1 million. In addition to age restrictions, only certain types of policies were accepted.
The paperwork needed for a life settlement includes 5 years of medical records and can take as long as 6 months to complete. Life settlement lump sum payments average around 15% of the death benefit. The money received in a life settlement is also taxable.

During the peak of the AIDs crisis in the 1980s, a new type of life settlement, called viatical settlements, become popular. At the time, viatical settlements were primarily for individuals with a terminal illness and life expectancy of 2 years or less. Today you will find some life settlement companies offering viaticals to individuals with chronic health conditions or a terminal illness with a life expectancy of up to five years. Although the federal government does not tax the money, some states may still require tax payments.

Converting a Policy to a Long Term Care Benefit Plan

The best way to pay for long term care is with a third type of life settlement, called a Long Term Care Benefit Plan. Not only is the settlement tax-free, there are no age minimums or health restrictions.

Several different types of polices can be converted to a Long Term Care Benefit Plan, including Term Life, Whole Life, Universal Life and Group. Policies can have a face value as low as $50,000. The average payout for a Long Term Care Benefit Plan is 4 to 5 times greater than any other type of life settlement – usually around 30% to 60% of the policy’s face value. The settlement process can also be completed in as little as 30 days with a minimal amount of paperwork. Money from the settlement is deposited into an irrevocable Benefit Account which is professionally managed. Medical and personal care expenses are paid from this account.

If you or a family member need long term care, including home care, assisted living, nursing home care or hospice care, converting an-force life insurance policy to a Long Term Care Benefit Plan can reduce financial worries and ensure the highest quality of care possible.

Elder Care Funding helps individuals and families find solutions to long term care financing. Complete the form below to find out if you are eligible for a Long Term Care Benefit Plan, or give us a call at 844-814-6511.

How To Pay For Long Term Care

How to Pay for Long Term Care

If you or a loved one are trying to figure out how to pay for long term care, you are not alone. It is estimated that nearly 10,000 baby boomers turn 65 every day and over two thirds of them will need some form of long-term care. Long-term care costs have only increased with the years and almost always vastly exceed whatever you might be expecting from Social Security or Medicaid/Medicare. Long-term care costs often impose great hardships on families who do not wish for their loved ones to end up in government facilities with shared rooms and substandard care.

Elder Care Funding would like to introduce our Long Term Care Benefit Plan as a solution to the problems you may be dealing with when it comes to affording long term care. But first, let us take a closer look at the issue.

Why are Long-Term Care Costs so High?

The simple answer to this question is: the demand for long-term care has increased dramatically in the last decade and the supply of long-term care providers has not grown fast enough to keep costs down. In the last decade, the costs of nursing home care have increased by nearly 6% every year. Today, a stay in a semi-private nursing home can cost over $100,000 per year. Costs for assisted-living facilities have also increased and can cost between $2500 and $6500 per month, depending on the facility and location.

Needless to say, these costs are substantial and can deplete all but the largest of nest eggs. My grandfather recently passed away and required long-term care for nearly eight years. He bravely served this great nation in World War 2 and became a successful cattle farmer after he returned home from the war. He retired a millionaire but ended up spending over 80% of his fortune on medical bills and long-term home care. If you or your loved one are not a retired millionaire, you could have great difficulty finding out how to pay for long term care.

Getting the Most out of Life Insurance Policies

Life insurance policies can be extremely valuable assets when it comes to long-term care. Unfortunately, they are often under-leveraged. Frequently, people trying to figure out how to pay for long-term care cash-out their life insurance policies or let the payments lapse because they can no longer afford the premiums. Don’t make this mistake! Life insurance policies with a death benefit in excess of $50,000 can be converted into long-term care plans which could be worth four times the cash surrender value! Elder Care Funding’s Long Term Care Benefit Plan can help you get the most out of your policy now!

Sign Up for the Long Term Care Benefit Plan Today!

If you cash out your policy, you could be losing a lot of money and could jeopardize your financial future and the care options for you or your relative. Take a look at the Elder Care Funding website to see if you qualify! Or call 1-844-814-6511 to speak to an elder care specialist!

Long Term Care Facts & Options

Do you or a loved one need long term care? A serious illness can require more than just quality medical treatment. Many times personal help and assistance will also be needed to maintain quality of life. Long term care refers to both the medical and non-medical needs of a disabled, chronically ill or terminally ill person. It can include many different types of services, such as shopping, meal preparation, laundry, housework, taking care of pets and transportation. The care can be provided at home, in the community or at a facility such as a nursing home.

Types of Long Term Care

When long term care is provided at home, it is often by a nurse or home health care aide. Community-type services include transportation agencies, adult day care centers and home care companies that send staff to help with personal errands, companionship and similar types of activities.  Nursing homes provide 24 hour skilled nursing and residential care, along with various types of rehabilitation therapy.

Long term care can also include the services of an Assisted Living Facility (ALF), where residents receive help with daily living such as bathing, dressing, housekeeping and food preparation, along with medication supervision and coordination of medical services.

Hospice care, another type of long term care, is for terminally ill patients with less than six months to live. The focus of hospice care is patient well-being. The care can be provided at home or in a facility such as an ALF or nursing home.

Long Term Care Costs

The cost of long term care will vary depending on location and the type of services required. According to government statistics, the average annual costs for long term care are:

  • $32,000 – $56,000 for homemaker services
  • $34,000 – $57,000 for a home health aide
  • Up to $33,000 for adult day health care
  • Up to $73,000 for assisted living
  • $47,000 to $270,000 for nursing home care

Even though studies show that 70% of the people that turn age 65 will need some type of long term care in the future, less than 3% of the U.S. population has long term care insurance. Simply put, most people never plan for an extended health crisis. Or, they incorrectly believe their health insurance will cover their medical costs and personal needs.

Health insurance policies do not pay for custodial care (non-skilled personal care). Coverage is typically for skilled medical care over a specific period of time, such as 90 days. When the coverage includes home care, it is for a maximum number of home visits. This is because the policy is written with the expectation that the patient will recover from his or her illness. Any type of custodial care, such as help with bathing, eating and dressing, is excluded from the policy.

Medicare works the same way. During the first 20 days, 100% of the person’s medical expenses (skilled medical care) will be covered. For the next 80 days, a co-pay will be required. Medicare will not pay for skilled care after 100 days.

Medicaid, another government health care program, offers long term care to low income individuals who meet strict financial requirements.
Using Life Insurance for Long Term Care

One way to pay for long term care is by converting a life insurance policy into a Long Term Benefit Plan. Not only will you receive significantly more money than the policy’s cash surrender value, the benefit payment is also tax exempt. It can also be adjusted if there is a change in care needs.

Elder Care Funding specializes in long term care financing solutions. If you would like to find out if you qualify for a Long Term Care Benefit Plan, complete the form below or call 1-844-814-6511 for assistance.