Financial Advisor Don Dirren Explains How To Use Life Insurance To Cover Long-Term Health Care
PHOENIX, AZ / ACCESSWIRE / November 5, 2020 / When your parent or other loved one needs long-term care, there's a lot on your mind. The last thing you need is to feel stress over how you're going to manage paying for the care that your loved one needs. Here, financial advisor Don Dirren explains how you may be able to utilize your loved one's life insurance policy to help pay for their long-term care bills.
First, Don Dirren recommends reaching out to the life insurance company directly to discuss what type of policy your loved one has. Many insurance companies are now offering combination policies that combine coverage for life insurance and coverage for long-term care. If your loved one has this type of coverage, it may be a simple process to use their life insurance payout to take care of long-term care bills, according to Don Dirren.
It's also important to talk with the life insurance company about whether the policy has accelerated death benefits, according to Don Dirren. Some life insurance includes this feature as a way to provide long-term care to people who have a terminal illness, have a life-threatening diagnosis (such as AIDS), are in a nursing home and are unable to carry out activities of daily living, or others who may require care for an extended period of time. According to Don Dirren, accelerated death benefits are a tax-free advance on your life insurance death benefit. Your loved one may have to pay an extra premium in order to have accelerated death benefits included as a part of their policy.
If you use the accelerated death benefit, Don Dirren recommends knowing whether you have a cap on how much money you can receive. For many policies that allow for the accelerated death benefit, you're limited to receiving half of your death benefit. Typically, you're able to receive two percent of the life insurance policy's value each month to cover the costs of long-term nursing home care, and half that amount for in-home care, according to Don Dirren.
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SOURCE: Donald Dirren