When you hit retirement age, there are many thoughts about how you will enjoy this time. Thus, many individuals in New York and elsewhere do not focus in on the potential need for long-term care at this point in time. While an estate plan can help secure assets and property, the abilities of an estate plan can go far beyond this. Thus, when one plans for retirement, it is also imperative to plan for various scenarios, as this helps protect the future they are and have worked hard for.

Long-term care planning

Having a will in place and setting up a trust may seem like important steps to take during one’s life; but the estate planning process can encompass other steps as well. Although one does not want to think about the possibility of requiring long-term care in a nursing home facility, the reality is that many will live to an age where long-term care is required. Therefore, planning for this situation is imperative.

Asset-based long-term care

An asset-based long-term care policy is an insurance policy that allows one to leverage his or her death benefits as a means to pay for their nursing home costs. While a life insurance policy will pay a death benefit to the named beneficiaries upon his or her death, allowing for funeral and burial expenses to be covered, these benefits could also be used to pay for the day-to-day living expenses.

This policy accelerates a death benefit payout in order to cover the often high costs associated with long-term care. But what if you do not require long-term care in your lifetime? Having this policy will have no impact. One’s death benefits will be paid to his or her beneficiaries at their death.

Pros and cons

The major benefit is that there will always be a payout, and it will be tax-free. This means that if long-term care is required, this policy will provide the means to cover these costs. It also means that if long-term care is not needed, then death benefits will be paid. In contrast, getting such a policy can be costly, and it is often more expensive than a traditional life insurance policy.

Myths of the estate planning process can cause some individuals to be misguided about the process and all the benefits that it can provide. An estate plan is not for just protecting assets and could be designed to address future costs associated with long-term care. No matter a person’s age, it is important to explore how a long-term plan could address a wide range of possible future concerns.