Long term care insurance can be a very effective way to protect and preserve your assets against the rising cost of long term care services. A policy can have many different decision points which affect the benefit characteristics, as well as the premium. We recommend focusing your attention on four key components:

• Benefit Amount – The amount can be structured as either a daily or monthly benefit
• Benefit Period – How long are the benefits designed to last?
• Elimination Period – The length of time after a claim begins before benefits are paid
• Inflation Protection – Benefit options include compound, simple, and guaranteed purchase

Traditional long term care insurance policies can be tailored to fit for individuals or can be shared between couples. We believe that are a few key questions in evaluating if a long term care insurance policy is right for you. These include: What is the amount of monthly income that you can contribute to cover the potential cost of care? Am I insurable? What are the tax benefits? Answers to these questions can provide great insights and guidance into the decision to purchase long term care insurance.

The advantages of purchasing insurance are the discounts available for being married, good health, and being a business owner. Additionally, benefits paid by the insurance company for a long term care claim are tax-free. Another big advantage is that all major insurance providers give access to their professional "care coordinators". This service can be an extremely valuable resource to policy holders who need guidance in choosing the type or quality of services in a particular area. This is especially true if someone needs answers very quickly.

Disadvantages regarding long term care insurance include the fact that premiums are not guaranteed and could potentially increase if the insurance carrier decided to raise rates. Also, one can not predict exactly what kind of care you will need or how long you will need it, a factor which can make the decision to purchase more difficult.

Long term care is most often defined as a chronic condition due to trauma or illness that limits a person's ability to carry out basic self-care tasks called "activities of daily living" ("ADL"). Some have characterized long term care as needing assistance with the activities typically associated with the first ½ hour of the day. These include eating, bathing, dressing, using the bathroom, transferring from a sitting or lying position, and taking your own medication.

Life does not stop when long term care issues arise, but things do change. Most of the time it is the family members of those needing care whose role changes the most, not the one needing care. Families have choices and consequences to deal with, and these are best done prior to a sudden need for action. Some of the more common approaches to dealing with long term care issues involve the generosity of family, friends, church members, government programs like Medicare and Medicaid, and an individual's personal income and assets. What is your plan to deal with a care event when it happens?

The costs of long term care can quickly deplete designated retirement assets. Most of the retirement plans today are built so that income supports a retirement lifestyle, not for the potential cost of long term care. Even clients with a lot of assets can have issues when someone needs care quickly, because assets do not pay for long term care services - income does. A big issue to clients with assets is how quickly they can turn an asset turn into an income stream if and when it is needed to pay for long term care.

Hybrid products have become increasingly popular over the last few years because of their unique ability to provide multiple layers of financial protection through a single product. A hybrid or combination product addresses more than one need, such as life insurance protection and long term care insurance. These products can provide cash value accumulation, guaranteed life insurance protection, and long term care benefits that greatly exceed the amount of premium paid. Because of these unique product combinations, a hybrid product can be less expensive than purchasing separate forms of life insurance and long term care insurance. Due to their unique characteristics, most offer a quick and streamlined underwriting process with no medical exams.

One approach that we have found to be very attractive for individuals who are concerned about long term care issues is to ask about their existing life insurance and determine if their overall situation can be improved by introducing a hybrid product. In some situations we have been able to enhance an existing life insurance policy and provide a substantial pool of long term care insurance funds by transferring cash value out of the old policy into a new hybrid product. Be sure to ask if your financial security could be improved by a hybrid product.