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    How to protect yourself against long-term care costs

    One of the frequently asked questions in the financial planning discussion is: “How can I protect myself against the possibility of long-term health care expenses?”

    This subject is a concern for most Americans. A recent survey of over 10,000 affluent investors, conducted by Spectrem Group and Vanguard Financial, found that long-term care was the top concern among individuals with $5 million to $25 million in assets.

    Many of these individuals are in a position to self-fund their long-term care planning. Besides the traditional coverage of paying annual premiums, there are other ways to maximize tax efficiency and reduce costs by using asset-based accounts.

    This especially makes sense in this low-interest-rate environment. Besides traditional long-term care insurance, there also is a proven hybrid strategy. There are opportunities to leverage a self-funding approach.

    Like most things in life, long-term care planning has changed. Traditional long-term care policies are experiencing multiple and, in some cases, substantial premium increases as the cost of long-term care rises. These rising costs are passed on to long-term care policy holders.

    This is a serious concern as individuals do not want their coverage to become prohibitively expensive just when it is needed the most.  Also, it is difficult to budget retirement expenses if premiums may increase substantially.

    Over the years, long-term care planning concepts and programs have entered the marketplace with the goal of avoiding this pitfall.

    Long-term care?

    Long-term care is what individuals may need if they reach a point in their lives when they are not able to care for themselves because of a physical or cognitive impairment. Most people equate long-term care with nursing homes, assisted-care living facilities, or adult day-care centers. However, professional care is often provided in home.

    A sobering fact is that a lifetime of retirement savings can be depleted by the need for long-term care. This can become a difficult scenario for the remaining spouse.

    How can individuals protect themselves and their family from these risks using both conventional and unconventional approaches? Everyone has a long-term care plan–whether it is self-funded or through the use of traditional or asset-based, long-term care insurance. Here are three options.

    Self-funding care

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