Long-Term Care Planning Options

Jeff Snyder, Gateway Financial Advisors, LLC. and Gateway Insurance Group, Inc.

Given the high probability of a long-term care event as we age, having a long-term care plan makes sense. Generally, there are six primary options when it comes to long-term care planning. They are:

• Do Nothing: Not advised but is the default for those who do not plan. Often confused with self-insured, hoping for the best is a pure gamble.

• Self-Insure: Also known as a sinking fund. This is where a person consciously sets money aside and earmarks it for long-term care expenses if and when needed. And having to pay 100 percent of cost at time of an LTC event is least cost effective.

• Standalone long-term care insurance: Also known as traditional long-term care insurance, these policies exclusively cover long-term care expenses in your home and or a facility and typically offer the most flexibility.

• Hybrid long-term care insurance: Also known as linked benefits or combo policies, hybrids pair long-term care with life insurance or an annuity. A hybrid policy provides coverage for extended care in your home and or a facility coupled with a death benefit. So, if you never need long-term care, your beneficiary will receive the life insurance benefit, from either product, when you pass.

• Life insurance with a long-term care rider: Today, many life insurance policies allow you to add long-term care coverage through a rider. A long-term care rider allows you to access the death benefit of a life insurance policy to pay for long-term care needs while you are living.

• Service contract: While similar, service contracts are not insurance. A common example is a home care only service contract where a person prepays for home care service hours from a local, regional, or national network of homecare providers.

The best strategy for you will depend on your priorities, situation, and a number of variables and often may include a combination of options. Talk to a professional who can objectively work with you to design an appropriate plan for your unique situation.

Jeff Snyder, with 35 years of industry experience, has personally recruited more than 700 financial professionals into the insurance and investment industry, and has trained, developed, and mentored more than 1,000 insurance and investment professionals throughout his career. With significant field experience, Jeff has been a company leading sales manager at Northwestern Mutual, John Hancock, and MassMutual, and has spent half of his career in the independent space where he has worked with Gateway Financial Advisors, LLC. and Gateway Insurance Group, Inc. for the past 9 years overseeing insurance production and business development as an Executive Vice President.

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