| Know you need long term care but can't afford | | | | transfer all, or a portion, of the proceeds into an |
| it? If you think with me outside the box, you will | | | | "asset based" long term care plan. Done deal. Ask |
| find that there are ways to pay for long term | | | | your financial planner about asset based LTC |
| care without taking the premiums out of your | | | | plans. |
| budget. | | | | 2. Withdraw money from an annuity. |
| Stop 100 people over 65 on the street and ask | | | | Over 90% of the people who own a non-qualified |
| them if they will ever need to go to a nursing | | | | deferred annuity die owning it. It is never |
| home and 99 will say, "No!" Folks tend to equate | | | | converted to a life income. Essentially it serves as |
| long term care insurance with nursing homes, but | | | | a longer term "rainy day" fund than a CD. The |
| there are other aspects of long term care. Home | | | | fact that the interest earned is not currently |
| care, assisted living, adult day care and hospice | | | | taxable is an attractive feature and makes the |
| care are all forms of long term care which cost | | | | money grow faster than a taxable CD. |
| money where the person never sees the inside | | | | However, at some point the piper must be paid. |
| of a nursing home. Planning for the many types | | | | When someone dies holding an annuity and leave |
| of long term care just makes good financial | | | | it to their children, the children are required to pay |
| planning sense. | | | | the tax on the gain. You may have heard this |
| However, long term care can be expensive, | | | | referred to as the annuity "ticking time |
| especially if a person waits too long to buy it. Age | | | | bomb".There is a way to avert this time bomb |
| and health problems could make premiums | | | | tax, provide long term care for yourself and not |
| prohibitive or even render the coverage | | | | take any money out of your budget. There are |
| unattainable. | | | | several ways to skin this cat...a. If your annuity is |
| What if there was a way to make sure you had | | | | large enough, simply take the 10% penalty-free |
| long term care coverage if you ever needed it, | | | | withdrawals each year and move them into a |
| but never had to take premiums to pay for it out | | | | 10-pay long term care plan.b. The only mental |
| of your income? Actually, there are quite a few. | | | | deterrent that comes up on this suggestion is that |
| Let's look at three of them... | | | | there may be remaining surrender charges on the |
| 1. Sell a life insurance policy. | | | | annuity. No problem. Most companies allow you to |
| Unbeknownst to many people, there is an "after | | | | annuitize. If the annuity pay-out period is at least |
| market" for life insurance policies that have | | | | 10 years, most of them waive any surrender |
| served their purpose and are no longer needed. | | | | charges. |
| There are companies that will buy policies on | | | | 3. Exchange all or a portion of a CD, non-qualified |
| behalf of pension and institutional funds which hold | | | | deferred annuity, variable annuity or IRA for an |
| them as part of their investment portfolio. The | | | | annuity/long term care combination plan. |
| best part is that they will buy them for more | | | | This entails simply moving money "from one of |
| than the cash value. | | | | your pockets to another". The difference is that |
| Other insurance policies that may be a candidate | | | | the pocket to which the money is moved has |
| are those where the premium takes a huge hike | | | | long term care benefits in it as well. This technique |
| because of the drop in interest rates, policies with | | | | also uses the "asset based" long term care plan |
| maximum loans about ready to collapse and | | | | approach. |
| create a taxable gain but with no money to pay | | | | So there you have it. Three ways to get long |
| the tax or even term insurance policies that are | | | | term care without a premium coming out of your |
| nearing the end of their term. | | | | pocket. |
| When a policy is sold, one option would be to | | | | |