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Is Asset-Based Long-Term Care Right For You?

October 9th, 2017 | Written by


The thought of needing assistance when you get older is an emotional one. With people living longer and the cost of health care increasing, what if you aren’t protected and need assistance?   It could be financially draining to you and your family if you’re not prepared.

According to the Genworth 2017 Annual Cost of Care Survey, 70 percent of people older than 65 will need long-term care at some point in their lives.  The annual median cost of long-term care services increased an average of 4.5% from 2016 to 2017 alone.  The median cost of an assisted living facility is $3,750/month; in Maryland it’s $4,150.   With these daunting statistics, the need for a funding mechanism for long-term care is apparent.

Outside of traditional long-term care insurance, there is asset-based long-term care which combines the benefit of life insurance and long-term care.  These types of policies have grown in attraction over the years, as one of the biggest hesitations for traditional long-term care is “what if I spend money on a policy and don’t need long-term care?”. With asset-based long-term care, if you do not use the money on long-term care costs, the insurance passes to your beneficiaries tax-free.  Unlike traditional long-term care insurance, your policy costs will never increase.  Also, most policies have a return of premium, if you change your mind.

These policies aren’t for everyone, as you need to have the assets to fund one of these types of policies.  However, most companies offer lump-sum premiums as well as annual premiums.

Here is an example of how an asset-based policy would work:

Client55-year-old female
Minimum LTC Benefit Period6 years
Single Premium$50,000
Initial Total LTC Benefit$229.984
Inflation:3% compound
Death Benefit:$71,110

In this example, if the client needed long-term care services at age 75, she would have a total long-term care benefit of $415,377 due to the inflation protection.  If she never needed long-term care, her beneficiaries are guaranteed to get $71,110 and if she changes her mind, she can get some or all of her money back.

No matter your circumstance, don’t risk not having the coverage you may need for long-term care.  Please reach out to me, so I can go over your options and help prepare you for a comfortable future.


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    This information is intended for educational purposes only. It is not intended to provide any investment advice or provide the basis for any investment decisions. You should consult your financial advisor prior to making any decision based on any specific information contained herein.

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    The Prosperity Consulting Group registered as a Registered Investment Advisor (RIA) in 2005. We have with a passion for providing clients with objective investment advice and wealth management solutions. Our purpose, coupled with our fiduciary commitment, is essential in helping clients achieve their financial goals. Our firm is dedicated to providing unparalleled financial planning and investment advice to individuals, families, businesses and institutions. We have identified key areas that are critical and integral to a client’s financial success. These planning areas encompass: Investment Planning & Management Retirement Planning Estate Planning Tax Planning Business Planning Insurance Planning Income Protection & Asset Preservation Education Planning 401(k) Planning
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