Linked Benefits Policies are the joining together of two separate insurance products (Life Insurance or Annuities) creating a new product that provides benefits for both or either occurrence. The LTC side of the Linked Benefits Plan behaves much like a traditional LTC policy. There are some special advantages of Life and Annuity Linked Benefit LTC Programs
Tax Incentive:
Linked Benefit Plans can provide you an opportunity to leverage your older Life Insurance and Deferred Annuity Policies that do not provide LTC benefit into plans that do. In many cases you can exchange or roll the cash values from older policies you already own into new linked Benefit Plans without triggering a taxable occurrence on any of the gain in your cash values.
So, it is possible to change tax deferred cash or annuity values into tax free LTC benefits regardless of the original cost basis.
Payments from the new plan can be “tax free” when paid as an LTC benefit. This is a very powerful planning tool.
LTC Weighted Linked Benefit Plans:
There are plans available that I like to call “LTC Weighted”. These plans provide a small death benefit or annuity value with a very significant LTC benefit. LTC Weighted policies are the best value when you are using a Linked Benefits Plan as your main LTC funding source.
Some can even provide an LTC benefit with no maximum benefit limit. In other words, they will pay benefits for as long as you require assistance. There is no limit in total LTC benefits payable.
If you’re considering a Life Insurance LTC Linked Benefits Plan as your funding solution, try to stay with the LTC weighted versions, unless you have a significant need to have a high death benefit.
Make certain that any plan that you purchase provides a long-term care benefit or rider that adheres to HIPAA’s (Heath Insurance Portability and Accountability Act) LTC Insurance Guidelines.
Linked Benefits Plans are far more complex than traditional LTC Insurance. However, they are strong flexible programs that can offer significant value for your premium dollar. Speak with a knowledgeable LTC advisor at Center for Long Term Care Planning in Boca Raton to determine if this type of plan is suitable and appropriate for your specific needs and concerns.