The costs associated with covering the expenses related to long-term assistance of someone in need are very high and escalating. Today, the average monthly cost of an Assisted Living Facility (ALF) in Florida runs between $3,000 (Median) and $7,920 (Maximum) and a Nursing Home at $7,500 (Median) and $9,750 (Maximum). Add the last 30-years inflation factor to a $7,500 figure and those costs could be easily $16,827 monthly or over $200,000 annually.
There is a 45% – 50% chance that we will need some level of assisted care whether in our home, at an ALF or we wind up in a nursing home. The questions is would it be for a 5-month period or 5-years? So the big question is, do I “self-insure” or “transfer the risk” to an insurance company? Does it make financial sense to pay ongoing premiums to protect your estate from as much as $1,000,000 or more of exposure or should a longer than average need for care was to occur, and with a 50% chance of (hopefully) never using the coverage at all. That tied with the fact that “traditional” Long-Term Care insurance policies have not been priced properly and, as such, policyholder’s premiums have been increased unexpectedly by many of the LTC carriers in recent years. You can see why this is indeed a conundrum.
I have discovered a much better way (in my opinion) to protect yourself and your estate known as a “Hybrid” policy. By combining a Long-Term Care rider with a permanent life insurance policy you are guaranteed not to be throwing away money on premiums that may never be recovered. This is accomplished by investing in a product that guarantees both a monthly LTC tax-free benefit and/or an income tax-free death benefit that would be left behind, over and above any LTC benefits received.