As life expectancy continues to increase, the likelihood of needing some form of long-term care rises dramatically. The U.S. Department of Health and Human Services estimates that nearly 70% of individuals over age 65 will require assistance with activities of daily living at some point in their lives, whether that care is provided at home, in an assisted living facility, or in a nursing home.
Without proper planning, these expenses can have a significant impact on your financial security. The costs associated with extended care can quickly erode retirement savings and place a financial and emotional burden on family members. Long-Term Care (LTC) insurance helps protect your assets, preserve independence, and ensure that you have access to quality care options of your choosing. Having coverage in place allows you and your loved ones to focus on what truly matters, your well-being and quality of life, rather than on how to pay for care.
As households transition into retirement, life insurance and disability insurance typically become less of a risk to financial well-being. Many households may be better served by shifting assets and cash flow toward long-term care policies. A Section 1035 Exchange allows policyholders to transfer the accumulated cash value of a life policy into a new long-term care policy without incurring a tax liability. Although a larger death benefit may be lost, income replacement is not as important, and future expensive health care would be covered more effectively.
When evaluating your long-term care options, it is important to consider your health, family history, and financial objectives. Coverage is generally more affordable when purchased earlier in life, and those in good health typically have access to more favorable underwriting terms. It is also worthwhile to explore both traditional and hybrid long-term care policies. Hybrid policies, which combine life insurance with long-term care benefits, offer flexibility by ensuring that if long-term care benefits are not used, a death benefit is still paid to your beneficiaries.
Integrating long-term care planning into your broader financial strategy is one of the most effective ways to protect both your assets and your family’s peace of mind. Establishing a plan today provides confidence that you will have the financial resources and personal choice to manage care on your terms. If you have not recently reviewed your life insurance or discussed how long-term care fits into your financial plan, now is an ideal time to explore the options available to you. Taking a proactive approach today by contacting your Heritage financial consultant can make all the difference in ensuring security and dignity in the years ahead.
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