Financing
long-term care: the life insurance solution;..
Financing long-term care: the life insurance solution; As Medicaid tightens and private long-term care insurance grows slowly, many American families have another resource at their fingertips.
Although long-term care insurance has been available for many years, it has not been widely purchased, it can be expensive, and it is filled with gaps that may not cover all expenses. Moreover, if Medicaid eligibility is tightened further, many individuals will be forced to either spend down or pay exorbitant out-of-pocket costs for their long-term care. However, most middle-class Americans do own life insurance--and that might present an answer.
As many Americans retire, the primary purpose of life insurance--to ease the financial burdens on families in the event of an untimely death--is no longer present. Most children have left the home and are self-supporting. Although life insurance is available to them as part of their parents' estate, if out-of-pocket costs for long-term care are required, this presents significant financial burdens for aging individuals and their heirs. Using and accessing life insurance benefits to pay for long-term care needs (or "life insurance for the living") is an option.
This would allow the benefit normally provided upon death to be paid out during the resident's length of stay in the long-term care setting. This is done through front-end spending of a permanent insurance policy that is called the Accelerated Death Benefit (ADB), or Life Benefit. If a policy has this provision, it will pay a percentage of the face value of the policy to the policyholder based on certain conditions...
