policies that may be a candidate are those where the premium takes a huge hike because of the drop in interest rates, policies with maximum loans about ready to collapse and create a taxable gain but with no money to pay the tax or even term insurance policies that are nearing the end of their term.

When a policy is sold, one option would be to transfer all, or a portion, of the proceeds into an “asset based” long term care plan. Done deal. Ask your financial planner about asset based LTC plans.

2. Withdraw money from an annuity.

Over 90% of the people who own a non-qualified deferred annuity die owning it. It is never converted to a life income. Essentially it serves as a longer term “rainy day” fund than a CD. The fact that the interest earned is not currently taxable is an attractive feature and makes the money grow faster than a taxable CD.

However, at some point the piper must be paid. When someone dies holding an annuity and leave it to their children, the children are required to pay the tax on the gain. You may have heard this referred to as the annuity “ticking time bomb”.

There is a way to avert this time bomb tax, provide long term care for yourself and not take any money out of your budget. There are several ways to skin this cat…

a. If your annuity is large enough, simply take the 10% penalty-free withdrawals each year and move them into a 10-pay long term care plan.
b. The only mental deterrent that comes up on this suggestion is that there may be remaining surrender charges on the annuity. No problem. Most companies allow you to annuitize. If the annuity pay-out period is at least 10 years, most of them waive any surrender charges.

3. Exchange all or a portion of a CD, non-qualified deferred annuity, variable annuity or IRA for an annuity/long term care combination plan.

This entails simply moving money “from one of your pockets to another”. The difference is that the pocket to which the money is moved has long term care benefits in it as well. This technique also uses the “asset based” long term care plan approach.

So there you have it. Three ways to get long term care without a premium coming out of your pocket.

Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, “The Estate Preservation Advisor”. To subscribe and get the free video, “How to Sell Your Life Insurance Policy for More Than the Cash Value”, go to theestatepreservationadvisor.com/freevideo.htm

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