Asset Based Long Term Care is an insurance policy that has long-term care coverage , as well as tax-free life insurance benefit and, that allows you to get your money back at any time.
Many people don’t like the fact that when you buy a traditional long-term care insurance you pay premiums for long-term care coverage you may never need. You can never get your money back. Asset Based Long Term Care gives you money back in one of three ways:
- Tax free long-term care benefits worth three to five times the amount of money you reposition.
- Tax free death benefit to your family at your death worth more than you repositioned.
- Return of every dollar you repositioned into the Asset Based LTC policy at any time you decide to cancel the policy.
We use the term “reposition” instead of spending or paying for because the money is still there until you either need long term care, pass away or move the money back into your bank accounts accounts.
Most people feel this is too good to be true. The simple fact is you are giving up the interest earned on that money for the time it is in the policy. Let’s face it-at current interest rates you are not giving up too much.
The first question you need to answer is “What assets will I use if I need to pay for long-term care?”. Most people will look at what they have and circle the cash as the first asset to use. Then they will look at cash value from the old life insurance policies. If you answered money market, savings accounts, CD’s or cash value from life insurance you may be a candidate for asset based Long Term Care.
Now that you identified the money you would use to pay for long term care, you would do what is called repositioning and move that money into the asset based Long Term Care account.