LONG TERM CARE COST – HOW TO FUND
If you have your home paid off and $100,000 or more in assets, you should strongly consider Long Term Care Insurance to protect the assets you have without having to become indigent and lose everything to a nursing home. Losing all your assets you have worked so hard for to become a Medicaid beneficiary is a difficult experience. A Medicaid beneficiary receives just $40 a month after being stripped of all assets. Learn how to fund long term care cost.
It really takes a small amount of money yearly to pay for these Long Term Care Policies. For example, if you home is paid off and you have $100,000 in assets and are just starting to receive approximately $1000 a month from Social Security, and could live on 2/3 of that amount, you could use the $4000 to purchase a yearly LTC policy.
The following are many methods to fund your Long Term Care cost:
US SAVINGS BONDS: Use the interest from US Savings Bond to fund your Long Term Care cost.
INCOME: You can use income from your full time or part time job.
ANNUNITY: Purchase an annuity and use the payments to fund your Long Term Care Policy.
INTEREST ON CD’S OR SAVINGS ACCOUNTS: Simply put your money in a Certificate of Deposit, or high yield savings account and use the interest to pay for a Long Term Care Policy.
SOCIAL SECURITY BENEFITS: You can use your Social Security Income to pay for Long Term Care Insurance.
MUNICIPAL BONDS: You can pay for Long Term Care Insurance with the interest you receive from Bonds you purchase from Municipalities and Local and Federal Government. Municipal Bonds are generally free of federal income tax and if you buy them in the state where you live, most are free of state and local taxes. (Corporate bonds have no tax-free provisions.)
REVERSE MORTGAGE: A reverse mortgage is a special type of home equity loan that allows you to receive monthly cash against the value of your home without selling it, with full rights to live in the house and retain title and ownership. You can choose to receive a monthly payment which could pay for Long Term Care Insurance. Typically you have to be 62 years old to qualify for a reverse mortgage. As long as you spend the payments you receive in the month that you receive them, the money is not taxable and does not count towards income or affect Social Security or Medicare benefits and does not count as income for Medicaid eligibility.
LIFE INSURANCE SETTLEMENT: These plans allow you to sell your life insurance policy for its present value to raise cash for any reason. This option is usually only available to women age 74 and older and to men age 70 and older. You may choose to use the proceeds to pay for long-term care services. The proceeds of the sale may be taxed.
LIFE INSURANCE WITH LONG TERM CARE BENEFITS: Some insurance companies combine life insurance with long-term care insurance. The idea is that policy benefits will always be paid, in one form or another. These products are relatively new and the features are changing as the product evolves. The amount of the long-term care benefit if often expressed in terms of a percentage of the life insurance benefit.
PENSION: Please see our page called “WHAT IS LONG TERM CARE – FUNDING & PENSION”
RETIREMENT FUNDS: Use your retirement funds to pay for a LTC Policy.
- Price comparison quotes from all the top insurance companies in the USA, including their financial profile, size, and A. M. Best ratings.
- Easy to understand side-by-side comparisons of each company’s policy features and options.
- We show you the policy similarities and differences.
- Become an expert instantly.