Long Term Care Expense Exposure

At R4®, it is our model to provide the following summary of options to mitigate long-term care expense exposure:

Long Term Care (LTC) Expense Exposure – Risk Mitigation Options

Long Term Care (LTC) Expense Exposure – Risk Mitigation Options

Traditional Long-Term Care Insurance Risks

o Premiums are not guaranteed to remain the same

o Premiums are lost if no LTC expenses take place

o Cost of living benefit increases (optional)

Talk to Us About Your Long Term Care

R4® Exit Strategies

  1. Liquid, Single Deposit (Down Payment) Strategy


    • Initial, one-time deposit used to fund the LTC expense pool with a multiplier effect

      • Hypothetical example: client deposits $100,000 and will have an LTC Expense Pool of $400,000 (this varies by age and gender)

    • Deposit is 100% liquid (like cash in a savings account) from day 1 – the premium can be returned in full at any time

    • Premium amount is guaranteed, no further premiums are due

    • Deposit is not lost if unused for LTC - expenses either through the return of premium or a death benefit payment at time of death

    • Cost of living benefit increases (optional)

  2. Capital Replenishment Trust

    • Draw on personal assets to fund LTC expenses in combination with a life insurance policy to
      replenish this money at death

    • Premiums are guaranteed – the premium will not change

    • Premiums are not lost since there is a death benefit even if no LTC expense exists

  3. Hybrid Strategy: Life Insurance Combined Policy with a LTC Rider or a Critical Care Rider

    • The policy will pay for LTC expenses up to 2% of the death benefit per month until the death benefit is exhausted

    • The death benefit is reduced by the LTC expenses. If no LTC expenses exist, then the death benefit is not reduced and is paid in full at death

    • Premiums are guaranteed – the premium will not change

    • Premiums are not lost since they are at the minimum used to fund the death benefit if no LTC expense exists
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