利用者:JonitaLizard2945

Lasting Care and the Liquidity Trap

Next year, the common cost for any room in a skilled nursing facility be more expensive than $70,000 for the semi-private "shared" room and a private room are more expensive than $90,000. Which was the price first year of care as well as just one individual or spouse. Since most will need take care of Three to four years (or longer) and yes it becomes painfully obvious why seniors are extremely worried about the future tariff of care.

With this particular type of financial liability, middle-class people are at greatest risk, but even families with significant assets will find themselves in the long-term care liquidity trap. It's not a matter of whether high value families can afford to fund these expensive services, because clearly they could. It is more about creating the liquidity had to spend on these types of services in a tax-efficient manner.

Families with significant assets typically own a diversified portfolios of securities, government and corporate bonds, annuities, real estate property, or any other assets. Unfortunately these assets are either illiquid or selling them at an inopportune time could lead to substantial investment losses. As a result, a permanent care event could cause a tremendous liquidity trap. Paying taxes on capital gains or withdrawals from qualified retirement accounts to purchase care only adds insult to injury. For that reason, long-term care insurance still produces a large amount of sense for even the ones that are able to afford to fund care out of their own pocket.

It's with justified reason that financial advisors sell life insurance on their clients to fund estate taxes; it isn't really because they can't afford to pay the taxes, it's to provide their estates with liquidity. LTC insurance offers a similar liquidity benefit and, like life insurance, provides a amount of tax advantages.

In the first place, the insurance plan premiums could possibly be deductible on individual tax statements. Secondly, qualified Click here that might normally be paid from other sources of income are reimbursed tax-free. For top income families, this may lead to 1000s of dollars in savings. Furthermore, if government policy is constantly on the favor future tax increases around the nations' wealthiest families, these tax advantages can become even more attractive the future.

Today, people that have significant assets can buy linked-benefit policies that combine LTC insurance with term life insurance. This unique plan design provides a long lasting care benefit together with premium liquidity. Several of these hybrid policies could be cancelled to get a 100 % refund at any time and for any reason and if the insurance policy holder dies before applying their policy benefits, the total fees are repaid for their beneficiaries through a guaranteed death benefit. Unless you apply it, that you do not lose it.

For prime net worth families, a linked-benefit LTC plan offers the liquidity necessary for future care and protects their investment principle as well.