Long Term Care & Life Insurance

Middle aged couple walking their dogAlternatives to traditional long-term care protection

A Worry-Free Retirement

Enjoy yourself knowing you’re protected

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.

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 services

76/81

Average lifespan in the U.S. today for males/females

91/92

Life expectancy of an 85-year-old male/female

Protect Yourself and Your Family From the Unknown Costs of Health Care

Middle-aged couple taking a selfieThe unknown cost of health care is among the most significant risks to any retirement plan. Unlike most spending in retirement, health care spending increases with age on average and is far more volatile. And 70% of people turning 65 today will eventually need some form of long-term care in their lifetimes.

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 shows5, 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.

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.

Funding Long-Term Care at 65

Severe long-term care event averages

Severe long-term care event averages

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

  • Self-funding from investments
  • Traditional health-based longterm care insurance
  • Asset-based long-term care benefits combined with whole life insurance

Potential Long-Term Care Event Outcomes

With no protection they will:

  • Have the highest risk for out-of-pocket costs associated with a mild or severe LTC event
  • Receive no death benefit

With health-based protection they will:

  • Have premiums that may increase over time
  • Need to purchase two policies to ensure they are both covered
  • Receive no death benefit

With asset-based protection they will:

  • Face the lowest risk for out-of-pocket costs associated with a mild or severe LTC event
  • Have premiums guaranteed never to increase
  • Have the option to cover both spouses with one policy
  • Receive a death benefit
    Note: Potential death benefit reduced if long-term care benefits are received.

Funding Long-Term Care at 50

Severe long-term care event averages

Severe long-term care event averages

A 50-year-old couple is beginning to think about retirement. They are exploring ways to optimize their retirement income.

They are considering how long-term care will affect their retirement. They decide to focus on a severe event because it will have the largest effect on their retirement income.

Their choices include:

  • Self-funding from investments
  • Traditional health-based longterm care insurance
  • Asset-based long-term care benefits combined with whole life insurance

Potential Long-Term Care Event Outcomes

With no protection they will:

  • Have the highest risk for out-of-pocket costs associated with a mild or severe LTC event
  • Receive no death benefit

With health-based protection they will:

  • Have premiums that may increase over time
  • Need to purchase two policies to ensure they are both covered
  • Receive no death benefit

With asset-based protection they will:

  • Face the lowest risk for out-of-pocket costs associated with a mild or severe LTC event
  • Have premiums guaranteed never to increase
  • Have the option to cover both spouses with one policy
  • Receive a death benefit
    Note: Potential death benefit reduced if long-term care benefits are received.

Life Insurance

Life InsuranceLife Insurance enables you to provide financial care for the family you leave behind when you die. Life Insurance will be most helpful to your dependent family members, if you pass away when your children are still young, your life insurance payout will financially support them at an expensive time.  In addition life insurance is a good idea to have to pay off any of your debts. (Credit card debts, mortgages, car loans, estate taxes, checks funding your children’s education, etc.) Finally, life insurance can be used for anything your beneficiaries chose.

Life insurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual’s or individuals’ death or other event, such as terminal illness or critical illness .

Here is a list of the three types of Life Insurance.  Beacon can help you pick the best plan for you based on your financial portfolio and current situation.

Term Life Insurance

Term life insurance policies begin with low premiums during the initial stages of the policy and these premiums increase steadily as the insured grows older. There is no cash build-up in a term policy and, accordingly, the death benefit will not increase.

Whole Life Insurance

Whole Life Insurance is a form of Permanent Insurance which covers you for your entire life, does not have to be renewed and does not expire provided you regularly pay premiums. The premiums for this type of policy remain level throughout the life of the insured. The amount of premiums in early years of the policy is considerably higher than in Term Life policies, which result in developing cash values. The cash value increases every year. You can take loans or withdrawals; however it will reduce the death benefit. Whole Life Insurance type is helpful to cover needs that do not tend to diminish with time, like paying taxes.

Variable Life Insurance

Variable life insurance offers a choice of death benefit options and a potential to accumulate non-guaranteed tax-deferred cash value that fluctuates based on the performance of underlying investment options that you choose. Variable life insurance is also a form of permanent life insurance. The premiums paid for variable life can be used in a wide range of investments including stocks. Extra money received from these investments can add to the value of what the beneficiaries will receive. This type of insurance does provide guaranteed benefits similar to whole life but comes with higher risks.