c5a83c_b9393d326de946efa7f78f84c7db9d30Combo Asset Based Plan Uses HSA to Provide a Lifetime Benefit!

A couple, both age 58 were looking for a way to set up a long-term care plan but were worried about increasing premiums and loosing the money they put into the plan. We showed them how to use a small part of their savings to leverage a guaranteed level premium that will provide a lifetime benefit of coverage for long-term care and pay them back if they never use it.

Here’s how their plan is set up:

The clients made an initial deposit of $54,000 into their plan. This purchased them an immediate benefit of $135,436 that can be pulled out for long-term care at a monthly rate of $4,064 per person until this benefit is gone. If the clients only use part of the benefit, the remaining benefit will be paid to their beneficiaries. The initial deposit of $54,000 also grows at a guaranteed rate and can be surrendered for the cash value at any time if they change their minds.

In addition to the initial benefit, the clients choose to add a Continuation of Benefits (COB) which will expand their long-term care coverage for an unlimited amount of time. The COB has a guaranteed level premium of $2,942 per year and allows the monthly benefit to keep up with inflation by growing at 3% every year. This means they will each have a monthly benefit of $7,126 in 20-years. The benefit amount is per person so they can each draw an unlimited amount of tax-free benefits out of this plan.

Because they leveraged a small amount of savings, they are able to guarantee a premium that will never increase and will go away once they are on claim. The premium for the COB is payable out of their Health Savings Account and is treated like medical insurance premiums for tax reasons.

Note: The COB can be cancelled at anytime and they will still have the initial benefit from the $54,000 deposit. They can also access this cash value at anytime or if they never use any long-term care benefits, their estate will receive the $135,436 as a tax-free death benefit.

If you know someone who would like to set up their own lifetime benefit plan like this, please contact us directly.