Page 76 - Growing Old Without a Plan for Long Term Care is not for Sissies_Neat

58 Growing Old Without a Plan for Long Term Care is not for Sissies Advisor or Financial Adviser for a more detailed explanation and to get an estimate of what kind of protection your money can buy. Although it may be a good option for you to consider, especially if you have what is called “legacy money”—money that you plan to pass on to the next generation—I urge caution in considering a linked beneft plan in place of a traditional long term care plan. Make sure you understand how the policy works and what you will receive if you need care, what your heirs will receive when you die and what guarantees are included in the policy. Also, when you consider the cost of providing the long term care component of a linked beneft policy, you might still be ahead to invest your funds and pay your long term care premiums from the annual income they generate. For example, if you could invest $100,000 at a before tax rate of 5%, your investment would pay an annual premium of between $3,500 to $5,000 depending on your tax rate and the deductibility of your long term care premiums. There are also some potential tax issues that you should consider. Still, if you have adequate liquid assets that are not needed for income and you like the idea of collecting from a policy whether you live or die, check out linked beneft plans. Summary: Many people fnd that a life insurance or annuity with a linked Long Term Care beneft can be a good way to reduce the fnancial risk of a need for long term care. Generally this is best used by those who have signifcant liquid assets they do not anticipate needing for retirement income. A linked beneft plan can be a good way to leverage those assets.