Tax and Money Tip of the Week:
Throwing Out The Old Rules of Money
June 16, 2011 | No. 47
Today we are returning to our series, “Throwing Out the Old Rules of Money” with Tip #3 Regarding Long Term Care Insurance (LTC).
Conventional long term care insurance advice: Buy long term care insurance with lifetime benefits, which pays for at home health care or nursing home or assisted living care as long as you live. This way of purchase is very expensive, but you won’t need to rely on family members or spending down your assets. Your children then inherit more.
My unconventional wisdom: Consider choosing 5 years of LTC benefits instead of lifetime benefits.
Why? The average nursing home stay is less than three years; fewer than 12% of people who enter a nursing home stay more than five years. Premiums on a five year benefit basis, often (but not always) are sufficient and can be 50% less!
Instead consider adding on a shared-care rider. This lets you use the benefits offered by your spouse’s policy if you exhaust your benefits.
This piece is not intended to be considered specific insurance advice, and one should consult his or her own situation with a qualified insurance agent or financial professional.
Questions or Comments?
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Mark Vitek, CPA/PFS, CFP®
…until next week.