If traditional long-term care insurance isn’t going to work for you, don’t fret. There are increasingly more ways to fund a long-term care plan without financially burdening family or devastating your retirement income plan. Here’s a look at a few of your choices.
Both life insurance and annuity hybrid products (including long-term care riders) solve the use-it-or-lose-it issue with long-term care insurance. If you end up not needing the long-term care benefit, you still have benefits available for other uses. Also, if you own existing life insurance or an annuity, you may be able to exchange that policy for a hybrid product offering a long-term care benefit or for a stand-alone long-term care insurance policy.
TRADITIONAL OR DEFERRED INCOME ANNUITIES
Receiving income whether or not you need long-term care is the benefit here. You also can purchase life annuity income over time to build that income source later, when you need it. A deferred income annuity can provide significant income at a relatively low cost due to the extended deferral period and higher payout rate.
SECURITIES BASED LINE OF CREDIT
The ability to draw cash from this line of credit can help you pay for long-term care in your home, or even at an assisted living facility. The flexibility of the line of credit is collateralized by one or more of your investment accounts, which allows you to keep your assets invested. This option gives you the capability to stay in your familiar environment longer or pay for an alternative. Discuss closely with your tax and financial advisors to see if borrowing against eligible assets may work for you.
As new financing options come to light, and your situation changes, talk to your financial advisor to help determine how to best plan – and pay – for long-term care and how it fits into your overall retirement income plan.
A Securities Based Line of Credit may not be suitable for all clients. The proceeds from a Securities Based Line of Credit cannot be used to purchase or carry margin securities. Borrowing on securities based lending products and using securities as collateral may involve a high degree of risk. Market conditions can magnify any potential for loss. If the market turns against the client, he or she may be required to deposit additional securities and/or cash in the account(s) or pay down the loan. The securities in the Pledged Account(s) may be sold to meet the Collateral Call, and the firm can sell the client’s securities without contacting them. The interest rates charged are determined by the market value of pledged assets and the net value of the client’s Capital Access account. Securities Based Line of Credit provided by Raymond James Bank, an affiliate of Raymond James & Associates, Inc. and Raymond James Financial Services, Inc.