Asset-Based Long Term Care

An alternative to expensive traditional LTC Insurance

Retired couple in their 60's walking their dog.

Long Term Care - A worry-free retirement!

In retirement, your assets generate your income. And to have the kind of retirement you’ve always wanted — spending time with your family, traveling, and more — you have to ensure that your retirement income is protected.

Elderly retired couple hugging

To enjoy retirement without having to make any drastic lifestyle changes, without having to rely on help from your friends or family, and without having to accept substandard levels of care as you age, your retirement income strategy has to account for three important factors:  

• How long you will live
• How your investments will perform over time
• How much you will spend each year in retirement 

Wade Pfau, Ph.D., CFA, and Michael Finke, Ph.D., CFP®, of The American College of Financial Services, have shown how these risks can be effectively managed. In recent studies, Dr. Pfau and Dr. Finke illustrated how an integrated approach to your retirement income strategy can optimize retirement income, and how long-term care benefits can protect you from extreme health care expenses in your later years.

70% of all individuals ages 65 and older will require some type of long-term care services¹
76/ 81
 Average Lifespan in the U.S. today for males/ females today²
91/92
Life expectancy of an 85 year old male/ female³
  1. “How Much Care Will You Need?” LongTermCare.gov. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need. html. Web. 21 February 2017.
  2. “Mortality in the United States, 2015.” NCHS Data Brief No. 267. December 2016. 
  3. “85 Year Old Life Expectancy.” HealthGrove.com. http://life-span.healthgrove.com/l/86/85. Web

Protect yourself and your family from the unknown cost of healthcare.

The unknown cost of health care is among the most significant risks to any retirement plan.  Unlike most spending in retirement, health providing a guaranteed death benefit, which cares spending increases with age on average guards against the possibility of lost premiums, and is far more volatile. And 70% of people turning 65 today will eventually need some form of long-term care in their lifetimes.4

 With traditional health-based long-term care insurance, you pay insurance premiums to help protect yourself in the event that you require long-term care. As history shows (5), the premiums will likely increase over time, and if you never need it, this form of long-term care insurance offers no benefit.

 A different generation of protection, such as life insurance or annuities combined with long-term care creates a hybrid or asset-based product consideration. This approach protects against long-term care expenditures while also providing a guaranteed death benefit, which guards against the possibility of lost premiums.

Elderly couple wearing baseball jerseys that combined read "together since 1954" cost basis example

Long-term care includes a range of services and support for people coping with physical and cognitive decline or who need assistance with daily living, from in-home care to nursing home and hospice care.

4. “How Much Care Will You Need?” LongTermCare.gov. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html. Web.
21 February 2017. 5. Pfau, Wade D., PhD, CFA, and Michael Finke, Ph.D., CFP. “Managing long-term care spending risks in retirement.” Based on median distribution of Monte Carlo simulations to reflect typical outcomes. All financial assets earmarked for long-term care are invested as 100% treasury bills.

Grandpa

Funding Long Term Care at 65

A 65-year-old is starting their retirement and considering their options for long-term care protection. They decide to focus on a severe event because it would have the largest effect on their retirement income.

  • Their choice includes self-funding from investments.
  • Traditional health-based long-term care insurance.
  • Asset-based long-term care insurance combined with whole life insurance.
Table showing comparison of cost for 65 year old couple to purchase traditional long term care, self fund or asset based ltc insurance

6. Pfau, Wade D., PhD, CFA, and Michael Finke, Ph.D., CFP. “Managing long-term care spending risks in retirement.” Based on median
distribution of Monte Carlo simulations to reflect typical outcomes. All financial assets earmarked for long-term care are invested as
100% treasury bills

Note: Products issued and underwritten by The State Life Insurance Company® (State Life), Indianapolis, IN, an OneAmerica company that offers the Care Solutions product suite. Asset- Care Form numbers: L301, R501, and SA31. In ID: L301 (ID), SA31, and R501. Not available in all states or may vary by state. All guarantees are subject to the claims-paying ability of State Life. This is a solicitation of insurance. An insurance agent or insurance company will contact you. The policy and long-term care insurance riders have exclusions and limitations. For cost and complete details of coverage, contact your insurance agent or company. All numeric examples are hypothetical and were used for explanatory purposes only. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice.

NOT A DEPOSIT • NOT FDIC OR NCUA INSURED
  • NOT BANK OR CREDIT UNION GUARANTEED NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • MAY LOSE VALUE

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