Tom Schrette and Alan Cash

Tom Schrette and Alan Cash

Dear Tom and Alan:

Following some strong advice from our CPA, I got a quote for long-term care for my husband and me.


The monthly payment is huge, and as my husband says, “What if we never use it? The money is wasted.”

You’ve mentioned alternatives before but I forgot what you said.


OK, Marge, we decided to contact a local expert. Debra Oberlin has been doing this for 32 years.

Here’s what she offers as alternatives to traditional long- term care insurance.

Deb: Marge, your CPA gave you good advice.

The potential need for long-term care and the financial and emotional impact that it could have on your family has to be addressed as part of any financial or retirement planning.

The need for care hasn’t changed. However, the possible solutions have.

The good news is that alternatives for funding and paying for long-term care have been evolving over the last five years and you have options to protect your family, income and retirement savings.

While “traditional” long-term care insurance is still a great way to provide a financial solution for a long-term care need, it does have some limitations.

Typically, it is “use it or lose it” insurance and you can face future rate increases.

Newer solutions referred to as “hybrid” long-term care products combine life insurance or an annuity with long-term care benefits.

These products have some advantages over traditional long-term care insurance, including guaranteed premiums and the ability to get most of your money back if you decide you don’t want it anymore.

They are highly customizable and allow you to build a plan that’s right for you.

Most people who receive care prefer to stay in their own home.

Policies today not only pay for help with eating, bathing, dressing, continence and ambulating (also known as the Activities of Daily Living, or ADLs) but also include help with the homemaker services of shopping, cooking and cleaning.

Home modifications may also be included in the policy along with assisted living facilities, residential care, memory care, adult daycare and skilled nursing facilities.

More recent changes to the tax code allow you to transfer or “exchange” funds to a new policy from life insurance or an annuity without paying taxes.

This can enable you to pay all or most of the premiums for long-term care coverage by exchanging the value of another product and potentially receive tax free benefits for long-term care.

Definitely a subject for your tax professional!

There are many solutions to product design and premium funding and no one solution is right for everyone.

Work with a long-term care specialist who understands these solutions and can help develop a plan for you that best suits your needs, finances and health conditions.

A specialist can “shop the market” with you to build a plan that you can live with.

Tom and Alan: Thanks Deb!

Deb Oberlin can be reached at 707-225 7773 or debra@ltcrpacific.com.

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Submit questions to schrette@gmail.com or alancash@gmail.com.