Berks County Medical Society Medical Record Winter 2019 - 25

Funding Options for
Long-Term Care
Why should you consider whole and term life insurance,
annuities and long-term care insurance to fund your
long-term care needs?
Whole and term life insurance, annuities and long-term care
insurance are three options to help you plan for the high cost of care.
While you may also receive support from family or loved ones, one
way to help ensure that you receive the type of care you want - in the
setting you choose - is through individual long-term care planning.
A comprehensive policy may help you by protecting your home, assets,
retirement funds, and your estate from being used to pay for care.
In turn, those funds may be used to maintain your spouse/partner's
standard of living, financial security, and peace of mind.
Genworth 2017 Cost of Care Survey, conducted by CareScout®, June 2017.
Based on 2017 national median annual costs for a private nursing home room
with a 4% inflation rate assumption for subsequent years.
1

For more information regarding benefits provided by Medicare or Medicaid,
visit www.cms.hhs.gov. Medicaid guidelines vary by state. Contact your local
Medicaid office for details.
2

Provided by Joseph Leary, CFA®, MBA, CFP®, CPA, and Jeremiah Sensenig, financial advisors with MassMutual Greater
Philadelphia.
Joseph and Jeremiah are registered representatives of and
offer securities, investment advisory and financial planning
services through MML Investors Services, LLC. Member SIPC.
Supervisory Office: 2 Bala Plaza, Ste 901, Bala Cynwyd, PA
19004. Tel: 610.766.3000
CRN202012-241043

Providing for long-term care is a growing and
evolving sector of the economy. Options for

individuals to mitigate the financial risks are not limited to
the insurance products described in this article, and new
options are being developed. Certain Continuing Care Retirement Communities are designed with a financial structure
requiring a large up-front 'entrance fee' in exchange for a
monthly fee that remains stable regardless of the level of
care required as the member ages, for example. For those
who prefer to stay in their own home as long as possible,
there are organizations that will provide home-based care
for a flat monthly fee if membership criteria-which include
being in good health at the time of enrollment-are met.

Self-pay | Self-pay may be the most obvious choice,
but it's not cheap and may not be affordable for
longer-term needs. With prices ranging from $21 per
hour for homemaker services and home health aides,
to day rates of $123 in assisted living facilities, to more
than $7000 per month for semi-private nursing home
care, self-pay may not be the most appealing option.
Government benefits | Despite what many think,
Medicare will pay for long-term care. While Medicare
covers some home and nursing home care, it is truly
for rehabilitation purposes and, therefore, not categorized as long-term coverage.
Traditional long-term care insurance | Traditional
long-term care (LTC) insurance has been in existence
for decades. It is not as cost-effective as originally
thought due to its many limitations. It's typically written to cover specific, and potential, long-term care
needs, however, unless it's broadly written, it may not
provide any benefits should you ever need longterm care.
Combined life insurance with long-term care
benefits | A strategic approach being utilized with
larger frequency is a combined life insurance policy
with long-term care benefits. These may have similar
features to an LTC (e.g., inflation protection, varying
elimination periods, and more), but would provide a
tax-free death benefit to beneficiaries should the policy
holder pass away prematurely.
Combined annuity with long-term care benefits |
Similar to option 4, a combined annuity/long-term care
policy might provide a higher dollar amount or greater
flexibility surrounding the tax-free death benefit.
Life settlement | Regardless of whether you own a
term or permanent life insurance policy, you may be
able to convert it into a long-term care benefit. The
value of your current life insurance policy could be
used as leverage to secure long-term care by assigning beneficiary rights depending upon your individual
situation. It is suggested that you contact a competent
financial adviser well-versed in long-term care to help
you navigate through the many choices to funding
long-term care.

- Lucy J. Cairns, MD
WINTER 2019

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http://www.cms.hhs.gov

Berks County Medical Society Medical Record Winter 2019

Table of Contents for the Digital Edition of Berks County Medical Society Medical Record Winter 2019

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