The Answer to Your Clients' Long-Term Care May Be Their Life Insurance

Near the top of the worry list for anyone considering retirement is the fear their health will deteriorate so much they’ll be forced to seek long-term care, a situation that could leave them and their families slammed with expenses far beyond what they can afford.

Surprisingly enough, the solution to this particular problem may be right in their home, tucked away in a drawer.

Many people don’t realize that a life insurance policy can be converted to pay for assisted living, home care and all other forms of long-term care. What’s really sad is that, when they’re suddenly confronted with the reality of long-term care expenses, some older people may let the policy lapse, figuring they can no longer afford it. And it’s the very thing that holds the answer to their financial worries.

Part of the problem is that while millions of people own life insurance policies, few of them understand their rights as owner.

Life insurance policies are assets. Think of them just like a house. The owner of a house wouldn’t just move out without selling their property. Why should the owner of a policy ‘move out’ without first finding out what the real value of the policy is?

GWG Life, a leader in providing solutions for seniors, is getting the word out to agents and advisors about two new programs aimed at helping to solve the problems many clients face in post-retirement:

The LifeCare Xchange Program with solutions that include benefits exempt from Medicaid spend-down requirements and used for post-retirement expenses such as long-term care and other health care costs.

The Book of Business Review Program where GWG Life representatives review your book of business to find clients who could benefit from the LifeCare Xchange Program.

These programs are aimed at finding new ways to serve your clients, even those you may not have been in contact with for years. The options we are offering move beyond simple cash transactions to sources of income to pay for needed care and expenses at a time when other options can be greatly limited.

Here are a few key facts about how a life insurance policy can be converted to a long-term care benefit plan and potentially rescue from the senior and their family from the back-breaking financial strain of long-term care:

The benefit plan is not long-term care insurance. A long-term care benefit plan allows policyholders to use a universal life or term life insurance policy to pay for long-term care. In essence, you can turn a death benefit into a “living benefit” that covers the expenses of the policyholder now.

You can convert when you need it. You can’t wait until you’re about to move into a nursing home or assisted-living facility to buy long-term care insurance. At that point, it’s too late. But you may be able to convert a life insurance policy to a long-term benefit plan at any time. There are no waiting periods, no care limitations and there are no costs or obligations to apply.

The full death benefit comes into play. The value of the exchange is not limited to the cash value, but is based on a variety of factors including life expectancy and health. If qualified, the senior will receive money they can use for their long-term care benefit plan. If the insured person dies before the benefit amount is exhausted, any remaining balance is paid to the family or the named beneficiary as a final lump-sum payment.

Fidelity's Retiree Health Care Cost Estimate shows that a couple retiring today is faced with an average cost of health care of $260,000 over their retirement and families can go broke trying to provide for a loved one. For many, this could have been avoided it had they only known about this solution.