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Top Benefits of Long-Term Care Coverage to Safeguard Your Retirement

As you build wealth for retirement, it’s important to safeguard those assets against substantial healthcare costs. One option is long-term care coverage. Traditional policies have a history of premium increases, but some alternatives exist to help you avoid those hikes. These include hybrid and annuity policies with long-term care benefits.

It Can Help You Afford Care

Many people who need long-term care coverage can’t afford to pay for it without raiding their retirement savings or selling assets. A well-thought-out long-term care policy can offset these costs so that you can keep your retirement savings intact and pass on more wealth to your heirs. You can buy a standalone policy or choose a hybrid product that combines a life insurance or annuity with a long-term care benefit. The latter options typically cost more, but they can help you lower your premium by choosing a longer elimination period, which is how long you must pay for care before the insurance begins paying. You can also add riders, such as inflation protection or waiver of premium, which allows you to stop making payments once your policy starts to pay out. Consider saving money earmarked in a high-yield savings account if you can afford your care. You can then use this money to help pay for your care later on if needed.

It Can Help You Pay for Care

Those who buy insurance to pay for these services can avoid raiding their retirement savings or burdening loved ones. They can also save on taxes. When choosing the best long-term care policy, consider how much coverage you want and whether you prefer a reimbursement or cash-benefit option (the latter may require your family to submit receipts). You should also compare features such as inflation protection and return of premium.

Generally, if you purchase a standalone policy, you can choose between a traditional long-term care insurance plan or a hybrid product that offers life insurance and benefits for long-term care expenses. Many insurers also provide options for increasing your premium payments or the amount of coverage over time. Working with a long term care coverage Woodbridge VA financial professional who can help you evaluate the costs and benefits of this type of protection is important. They can assist you in figuring out how to balance best the price of this coverage against your retirement goals.

It Can Help You Stay in Your Home

Most of us know we could need long-term care as we age, but many people are unsure how to plan. Long-term care coverage can help you pay for services that allow you to stay in the home of your choice. Depending on the policy, these services may include paying friends or family members to provide care or other home-based options. The coverage also allows you to avoid liquidating significant assets and help you qualify for Medicaid if your savings are depleted. Some people can afford long-term care expenses and choose not to purchase a policy. Still, others find that a policy can protect their retirement savings while helping them feel confident that they’ll be able to receive the services they need. A financial advisor can help you determine if long-term care coverage is right for you. 

It Can Help You Pass on Your Wealth

The decision to buy long-term care coverage is a personal one that depends on your financial situation and family structure. It’s important to shop early because the older you are when you purchase the policy, the more expensive it is. Traditional approaches can have a “use it or lose it” benefit, meaning you forfeit your premiums if you don’t need the care. But some options protect your savings, such as hybrid life insurance with long-term care benefits or partnerships with Medicaid. Another option is to seek a financial advisor to help you plan for these costs.



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