Long-Term Care Insurance
Modern Medicine Extends Lives and Increases the Need for Living Assistance
It’s wonderful–diseases and events that used to cause early death are more under control. Our extended lives increasingly require some living assistance at some point…often temporary. LTC insurance pays for that need and preserves wealth.
The Growing Need
With increasing age and longevity, the risk of chronic disease rises along with that of age-related disabilities from chronic diseases such as pulmonary disease and diabetes to age-related loss of hearing, sight and movement
(arthritis), cognitive illnesses such as dementia and Alzheimer’s to injuries from falls. The incidence rate of disability from each of these varies considerably by country based on longevity and access to appropriate healthcare and rehabilitation services.
As the number of older persons continues to grow along with their longevity, the need for long-term
care will increase significantly for those aged 80 and over, and in particular for older women who live
longer. The number of older persons age 80 and above is estimated to grow from 125 million in
2015 to 434 million in 2050.
Due to the rise in life expectancy and the growth in the number of older persons, the incidence of
mental health diseases such as dementia and Alzheimer’s continues to grow, leading to a further
source of increased demand for long-term care. The incidence of dementia is projected to grow
from 47 million worldwide in 2015 to 75 million in 2030. For instance, in the United States, nearly
40 per cent of the population aged 85 years and older suffer from Alzheimer’s and dementia.
Asset-Based LTC Insurance
The Perfect Savings Plan
Asset Based long-term care plans have been around since the late 1980’s but became the fasted growing type of policy after passage of the Pension Protection Act. Asset Based plans allow a person to deposit money into a long-term care plan that will provide them future tax-free long-term care benefits. For every dollar you put into your plan, you will get a multiple of dollars back (up to unlimited) tax-free should you need long-term care. If you never need care or choose to cancel your plan, you can get your initial deposit back, plus interest in many cases. Some plans even offer additional benefits such as tax-free death benefits should you die before using or surrendering your plan.
Assets based plans work like the ultimate savings account. The money is guaranteed to grow at a set rate, the clients have access to this money if needed, and if they need long-term care, they will get a multiple of the initial deposit back tax-free. When properly designed, these plans will cost the client nothing and can provide an unlimited amount of long-term care benefits.
