Long term care costs are skyrocketing
Seniors Would Rather Plan to Pay for Funerals Than Long-Term Care
The odds are nearly 70% that either you or your spouse will need long-term care services at some point in your lifetime. According to The Genworth Cost of Care Report: 70 percent of people 65 and older will need some kind of long-term care eventually.
The skyrocketing long-term care premiums has one financial planner recommending The New Reverse Mortgage as an alternative.
George Gagliardi is a certified financial planner focused on creative solutions to help preserve and grow his clients’ assets. A recent MarketWatch article shows that Gagliardi is skeptical of traditional retirement advice when it comes to protecting his client’s assets from the ravages of health emergencies and long-term care costs.
Premiums for long term care insurance are also exploding
Federal employees participating in the long-term care insurance program learned this harsh lesson in 2016 when their premiums jumped 126%. Two choices were offered- pay the higher premium and retain your current coverage or pay the same premium for less coverage.
Many seniors are losing sleep wondering how these costs will affect their retirement plans.
Few financial planners stray from conventional recommendations and approaches to asset management and preservation. Today’s volatile markets require creative solutions. Gagliardi takes a different approach favoring two alternatives: hybrid long-term care policies and the Home Equity Conversion Mortgage.
Hybrid long-term care policies?
Hybrid long-term care policies are build on the chassis of a cash-value life insurance contract with a long-term care insurance rider that allows the policyholder to tap into the policy’s value while being covered for continuing care costs. In addition, these policies can pass on a death benefit to the heirs should long-term care services not be needed. The downside is this policy will take a chunk of your retirement savings to pay for it.
Reverse Mortgage to pay long term care costs?
His second alternative is the Home Equity Conversion Mortgage. His strategy centers on a variation of the standby reverse mortgage strategy, advising clients to get the HECM and then let the line of credit (or principal limit) grow for a decade or more until the age when long-term benefits are most likely needed.
“It offers flexibility while preventing you from depleting your assets early on,” Gagliardi said.
“With long-term-care insurance, everybody thinks they should get it but it’s expensive. But they may not know about this strategy that can provide the same peace of mind if they require costly, ongoing care.”
But if you need long-term care, the money must come from somewhere.
If it comes from an insurance policy, maybe you’ll never have to use it. With The New Reverse Mortgage, it’ll leave you with more money to use that would otherwise go to pay the insurance company”, Gagliardi said.
The New Reverse Mortgage isn’t for everyone…but it could be!
Is the New Reverse Mortgage is right for me?
If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.
Some of this information first appeared on HECMWORLD.com