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Using Long-Term Care Insurance for Estate Planning Purposes

From Inside Personal Finance

Longtime subscribers know I recommend that everyone, including you, have a long-term care policy, especially when you’re young (in your 50s) and it’s still affordable. The reason I say that is because the cost of a nursing home will deplete your assets faster than almost any other expense. But what if you already have plenty of money … should you still own long-term care insurance?

Bill, a listener to my show, recently asked me that question. Both he and his wife are in their early 60s and in good health. Bill also has a net worth of about $2 million. Are he and his wife candidates for long-term care insurance, even though they can afford the cost of a nursing home?

Yes, but for a different reason than usual.

In Bill’s case, the policy is used to preserve his assets. Although he could afford the $70,000 annual cost of a nursing home, buying a policy for $3,000 lets him preserve his wealth for his heirs.

So if you want to protect your assets for your children and grandchildren, you should buy a LTC policy. It’s a very cost-efficient tool for estate planning.

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