4 Old A ae ) Good Options For Funding Your Long-Term Care (NAPSA)—Most Americans over | | the age of 65 will require long-term care at some pointin their lives, with today’s average senior likely to incur $138,000 in future long-term care costs, accord- private health insurance. Unfortunately, the cost of long-term care insurance has risen significantly in the past decade and the numberofcarriers selling coverage has shrunk from roughly 100 to only a dozen orso now. That leaves Medicaid as the primary insurance coverage source for long-term care needs, butqualifying for Medicaid requires the virtual depletion ofall personal assets. Faced with this dilemma, American seniors must get creative about how to pay for long-term care or risk a majorhit to their retirementfunds. ‘The National Association of Insurance Commissioners (NAIC), the U.S. regulatory support organization created by the chief insurance regulators from all 50 states, formed a Long-Term Care Innovations Subgroup to study this issue. ‘The group recently issued a report that endorsed some viable options for privately funding long-term care costs. Four specific options they laid out includedthe following: Single Premium PermanentLife Insur- ancePolicies Annuity Long-Term Care Hybrid Policies Impaired-Risk Payout Annuities Life Settlements. Of these recommended long-term care financing options, a life settlement is the only onethat does notinvolveseniors buying anything or spending any moneyoutof their own pockets. A life settlementis a proven strategy for generating cash from an unwanted or unaffordable life insurance policy. In life settlement transaction, a senior a We\ \ ing to the U.S. Department of Health & HumanServices. This is different from medical care and includes personal help with daily living activities such as bathing and dressing. These services are typically not covered by Medicare or other traditional " Sy YL? —_ If you or someone you care about needs long-term care, selling an insurance policy can help you affordit. sells his or her life insurance policy to a third-party investor for an immediate cash payment. The investor then takes over the premiums on the policy and collects the death benefit when the insured passes away. Consumers whosell their policies receive a lump sum paymentthatis gen- erally four or more timesgreater thanif they lapsed or surrenderedtheirpolicy, according to the NAIC, and these funds can then be used to pay for long-term care expenses without depleting other retirement assets. The NAIC reportalso notes that seniors “in immediate need of long-term care can sell their life insurancepolicies and receive the proceeds of the sale free from federal tax (Internal Revenue Code $101(g)). “Some elder care providers and professional advisors recommendthat their clients consider usinglife settlement proceeds to fund an account with a bank and trust company to make monthly payments directly to a designated long-term care provider,’ says the NAIC report. “Upon death,in addition to a modest reserve to defray final expenses, any remaining balance in the account is paid to a designated beneficiary.” For more information or to find a life settlement professional who can help you look into this option and see if it makes sense for you,call (800) 664- 9024 orvisit the LISA website at www. lisa.org.
