“A study by the U.S. Department of Health and Human Services suggested that the average senior today would be paying almost $140,000 for long-term care over the course of their retirement.”
Annuity Long-Term Care Hybrid Policies
This form of coverage entails paying a set amount of money into a policy with two parts – a hybrid policy. The first part ensures that a fund with a certain amount of money – more than has been paid in as a premium – becomes available as long-term care benefits. The second part of the policy is a life insurance policy. For example, Thomas could pay in $40,000 into a hybrid policy account and have $70,000 in long-term care benefits created immediately, and another $70,000 as the death benefit that would become available to children, spouses, or other beneficiaries after Thomas’ passing.
Life settlements simply entail selling an unneeded or unwanted life insurance policy, usually through a broker, to an interested buyer. In return, the seller receives a lump sum (usually larger than the cash surrender value of the policy offered by the insurance company), and the buyer takes over premium payments and receives the death benefit once the insured passes away.
Single Premium Permanent Life Insurance Policies
The single premium permanent life insurance policy is what it sounds like – similar to the hybrid policies mentioned above, in a single-premium policy, the policyholder pays only one large premium into the account and, in return, receives a death benefit upon passing, with the death benefit guaranteed as paid up until death. This usually entails a senior spending several tens of thousands of dollars on this single premium payment.
Impaired-Risk Payout Annuities
Impaired-risk payout annuities are a financial engagement in which one can invest a large lump sum with an insurance company which, in return, guarantees a certain monthly or yearly payment until the death of the investor. By analyzing medical records and engaging the services of a life expectancy underwriter, the life insurance company, when entering into these kinds of engagements, is betting that their payouts will be less than the person paid in as a lump sum. That is, that the person will live less than the time it takes for the insurance company’s payouts to surpass the amount the investor paid them as a lump sum. On the other hand, if the investor lives longer due to an improvement in their health situation or because a new medicinal regimen is helping, they could very well gain more out of the monthly or yearly payments than they paid in in the beginning.
Out of these four different ways to ensure an income for yourself or some financial benefit to those who, potentially, will be paying for your long-term care for the foreseeable future, it is the life settlement that requires no extra investment out of pocket from an interested senior. The life settlement method relies on the senior having an active life insurance policy. But if you have that, it’s possible to get a large sum relatively quickly without having to transfer any of your remaining funds out of your accounts. The money received from the sale can go towards paying for long-term care that may be crucial to helping a senior lead a comfortable, dignified life in their final years.
For more information on your life settlement options contact ALIR Settlements.