Client of the Month:Long-Term Care Savings Account in Action

October 24, 2016

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Step Three:
Design Your Custom Plan and Get Approved

banner123470bf1180ed7f21633f236582ccff8c56Female 65 was looking for a way to protect her savings and retirement accounts from the high cost of a long-term care situation. She had assets available, wanted to avoid paying premiums and wanted her money to go to her children if she never needed long-term care.

We structured a plan where she made a single deposit of $100,000 into an asset based long-term care savings plan. This provided her with an initial long-term care benefit of $300,000 on day one that she can withdraw over a six year period tax-free. The long-term care benefit as well as her cash value will grow over time increasing the value of the plan each year.  If we go out 10 years, her cash value is $122,407 and her long term care benefit has grown to $367,222. Going out another decade to year 20 and she has $149,721 in cash value and $449,164 available to pay for long-term care.

The client or her estate will always get the cash value back minus any long-term care expenses paid out of the plan on her behalf.  Remember, the money comes out of this plan tax-free for long-term care and is not counted as income.  Also, she does not have to pay interest on the annual growth of the policy like she would in a CD or savings account. This plan is currently providing her a tax-deferred growth rate of 2.05%. Better than current savings, CD’s and bonds at today’s rates and she will always have three times her cash value available to her for long-term care expenses.

If you would like to learn more about how these and other plans might work for your situation, give us a call at 425-748-8188 as we will be glad to discuss your situation.

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