Lazy Money for Long Term Care Insurance
Life insurance can sometimes be swept under the carpet in our minds. We know we have coverage, but we don’t visit the policy annually. Sometimes as clients get older their insurance needs start to shift. This is the best time to look at those insurance contracts. As we start to prepare for retirement, long term care becomes an issue that is put on the table. What if you could take lazy money out of your permanent life insurance policy and redirect it to a long term care need?
With life insurance there is a provision known as a 1035 exchange. This is basically a tax code that the government allows you to transfer the internal cash value from one life insurance product to another.
You have two choices or styles of permanent life insurance products that can help you solve for a long term care need. There are traditional universal life insurance policies that contain a rider or provision where a portion of the death benefit can be used if a long term care situation should come up. These policies usually maintain their level death benefit. If you pass away and never need a day of long term care your beneficiaries will receive that death benefit.
The second style is what they refer to as a “hybrid” policy. It’s still a permanent universal life insurance product, but the death benefit internally decreases every year. While that’s happening, the long term care benefit is increasing. The attraction to these products is that you have the ability to pay them with one single premium.
Both styles can work to help you take that lazy money that’s been building up in your permanent life insurance policies, and redirect it for a long term care need. So don’t let those old permanent life insurance policies get swept under the carpet. Pull them out, and have them evaluated. There could be a tremendous value to using that cash value to solve for a long term care scenario.
About the author: Mark Yurkovic has been in the life insurance business for over 12 years, and holds CLTC, LUTCF, and CES designations. He enjoys building remote control boats, and playing instruments including the piano, guitar, banjo, and mandolin. Mark would love to discuss life insurance options and work towards finding the best policy fit for your family. You can contact Mark at 1-800-651-1953 or MYurkovic@Pivot.com