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Alternatives to LTC insurance

There are other ways to help pay for long-term care other than purchasing long-term care insurance.

Accelerated benefits: Some life insurance policies allow access to benefits while the insured person is still alive. This option is usually restricted to cases where the insured has been diagnosed as terminally ill and death is believed to be imminent within a specified period of time. A portion of the life insurance benefit is paid to the policyholder for long term care rather than to the beneficiary at the policyholder's death. Check with your life insurance company to learn if this option is available to you.

Annuities: An annuity is a contract with an insurance company that provides payments on a periodic basis. Generally, these contracts require that you make a lump sum deposit with the insurance company. In return, you will receive regular payments, including interest, according to the terms of the contract. Like long-term care insurance, annuities require advance planning. You should seek professional advice from a licensed insurance agent, accountant or attorney.

Combination life and LTC policies: These policies are more expensive, but they will provide you or your beneficiary with LTC benefits, death benefits or both.

Home equity loan: This is a loan that homeowners can get from a mortgage company based on the amount of equity in their home. If a spouse enters a nursing home and the remaining spouse wishes to continue living in the house, this is an option to consider. Consult with a qualified tax expert or attorney before making your decision.

Medical Assistance: Approximately 50 percent of nursing home care is paid for by government welfare programs. The most common of these programs is Medical Assistance, or Medicaid. Be aware of two important facts about Medicaid: 1. Not all nursing homes will accept a person on Medicaid; 2. Not everyone is eligible for Medicaid.

Personal savings: Many seniors pay for long-term care with personal savings. Once the savings are gone, the only option remaining for many of them is to apply for Medical Assistance.