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Long-Term Care & Life Insurance Hybrids
September 30, 2011
Filed under: Asset Protection,Elder Law,Life Insurance,Long Term Care — Christopher J. Berry | Estate & Elder Law Attorney @ 11:17 am
With more and more people living longer, it comes as no surprise that there is heightened interest in long-term care planning. That is why we created a website geared towards Michigan elder law and long-term care at the www.MichiganElderLawCenter.com. People are beginning to recognize that the cost of extended long-term care can wipe out any nest egg pretty darn quickly. Our Michigan elder law practice is focused on providing solutions to reducing the high cost of long-term care. Many people look to long-term care insurance as one of the ways to hedge against long-term care costs.
There is quite a bit of talk lately about the new life insurance and long-term care insurance hybrid products. The best way to understand how these new plans work and why they are catching on is that the new plans are a blend of asset protection and long-term care insurance. You avoid losing premiums you have paid if, in the end, you beat the odds and don’t need long-term care
So, if someone owns a life/long-term care hybrid, either they will use their policy to pay for extend care expenses, or their heirs will receive an inheritance that is greater than what was paid into the product. Now the downside of such planning is these products typically require a substantial one-time upfront payment, for example $50k. Second, if an individual needs only long-term care protection, a stand alone long-term care insurance contract gets you more benefits for each premium dollar.
Protecting against long-term care costs is an important consideration for anyone doing estate or financial planning, these hybrid long-term care and life insurance products are one tool in the toolbox to consider.
Attorney Christopher J. Berry is a Metro Detroit estate planning and elder law lawyer who helps families, seniors, veterans and business owners with their important legal needs. Oakland County estate planning lawyer, Christopher Berry is a partner in the Bloomfield Hills law firm of Witzke Berry PLLC. Mr. Berry practices in the areas of estate planning, business, probate, veterans benefits & Medicaid planning.
I always caution clients to not be the first one in for new products like these that hit the market. They may turn out to be great but do I want my client to be a guinea pig if they are not so great. Attorneys also need to be wary about endorsing products that are new. They may be great but if not you know who gets sued in the end.
Steven, good points.