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Do You Know Your Long-Term Care Options?

Long-Term Care Insurance is More Flexible Than You Think

As individuals age, one of the biggest concerns they have is what will happen to their money if they find themselves requiring in-home health care, assisted living and/or nursing home care.  These services and related costs can substantially erode a nest egg: in Pennsylvania, the average cost for a private room in a nursing home is $258 a day, according to the 2010 MetLife Market Survey of Long-Term Care Costs. Upwards of 70 percent of people over age 65 will need some kind of long-term care (LTC) during their lifetime, according to the National Clearinghouse for Long-Term Care Information. Many will end up spending hundreds of thousands of dollars on these costs, sometimes spending their entire life savings. 

While most people are concerned about this risk, very few people take action to protect themselves against the high costs of long-term care.  One of the main reasons that so few people work to protect themselves is that they believe coverage is too expensive and that if you don’t use it, you lose it. The typical LTC insurance policy can cost anywhere from $2,000 to $5,000 a year.  In the past, if you died without ever needing any kind of long-term care protection, the entire premium that you paid over the years would be lost. 

However, today there are alternatives available that you can consider so that you can still help protect yourself from LTC expenses while eliminating the “use it or lose it” risk.

One such alternative is an insurance policy that offers a return of premium.  This type of insurance requires you to deposit one lump sum with the insurance company.  Often, rather than placing money in a low interest CD, you can put these funds to use by purchasing this kind of protection.  The great benefit of this plan is that you have 100 percent access to your money if you ever change your mind about the insurance.  In addition, if you die without ever needing LTC protection, your beneficiaries would receive a lump sum tax-free death benefit.

Another alternative to consider, if you don’t have a lump sum of money to give to the insurance company, is a non-traditional “pay as you go” policy.  This type of coverage would be similar to traditional long-term care insurance where you would pay an annual premium to the insurance company.  The big difference, however, is that if you passed away without needing long-term care protection, instead of all of your payments being lost, your beneficiaries again would receive a lump sum tax-free death benefit.

These are only two of the many ways to protect your assets from potentially expensive LTC costs. It is in your best interest to consult a qualified financial professional to determine what strategy makes the most sense for you and your family.


Christopher Scalese, financial advisor and president of Fortune Financial Group, is best known as Northeastern Pennsylvania’s Retirement Specialist. Scalese has spent the last two decades of his career assisting area residents with the financial transition from the working years to the retirement years. His primary goal is to help individuals structure their finances so that they have a steady income throughout their lifetime, while working to ensure their finances aren’t overly exposed to risk or unnecessary taxation. Scalese is an investment advisor representative, life and health insurance licensed and currently working on earning his Chartered Financial Consultant designation. Scalese received his Bachelor of Science degree in finance and Master of Business Administration degree from Wilkes University. For more information about Christopher Scalese and Fortune Financial Group, please visit

Fortune Financial Group, Inc., is an independent firm with securities offered through Summit Brokerage Services. Inc., Member FINRA, SIPC. Summit Brokerage Services, Inc., its affiliates and Fortune Financial Group do not give tax or legal advice. You should consult an experienced professional regarding the tax consequences of a specific transaction.

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