by Richard Schlueter, Vice President – Insurance Services, Wealth Enhancement Group

I am pleased to see that many of our clients have recognized the consequences of a long-term care event and have taken the necessary steps to purchase long-term care insurance. Even so, knowing that health care costs are rising significantly and that improved technology and medicine mean people are living longer and subsequently requiring greater assistance, we have far to go.
 
A common hesitation when considering the purchase of long-term care insurance is the idea that a person will self-insure against the risk. This comes even after having discussed with them care likelihood, average costs, and family consequences. We also hear objections that long-term care insurance is too expensive to ultimately receive no benefit if care is never needed.
 
For many clients the answer has been asset-based long-term care insurance. In simple terms, it consists of a single premium life insurance policy with long-term care benefits.
 
For example, a couple age 65 and 67 reposition $75,000 that they currently have invested in CDs into an asset-based long-term care policy. Assuming good health, the $75,000 will buy approximately $160,000 of survivorship life insurance. At the same time, the policy will provide monthly long-term care benefits of approximately $3,200 for at least 50 months. The policy also builds cash value and has a minimum 4% interest crediting rate.**
 
If the policy is not used for long-term care benefits, the $75,000 will be leveraged into $160,000 tax-free dollars for the benefit of heirs. If long-term care is required, benefits that exceed the initial $75,000 contribution are available. In this case, 50 months of benefits equaling $3,200 per month totals $160,000 of total long-term care benefits. Along the way, the cash value is available for any use, but distributions will have an affect on both long-term care benefits and the death benefit.
  
If you would like to know more about asset-based, long-term care insurance please contact Rich Schlueter in Insurance Services at, 763-417-1672 or 1-.800-492-1222.

**This is for illustrative purposes only. Each person’s situation will differ.