What is the difference between LTCi and LIRP? Why have one vs. the other?

LTC insurance gives you immediate benefits. You could have a stroke or an accident two weeks after you get your policy and have hundreds of thousands of dollars to pay your claim. A Life Insurance Retirement Plan (LIRP) needs many years to grow to give you a significant amount of benefits. Well, you could put a LOT of money into it at the beginning, but most people don’t. The idea is that with a LIRP, you don’t have a claim for a long time – maybe 20 years or so – then you use up to 90% of the cash value to pay your claim. As long as you don’t cancel the policy, that money comes out tax-free. It reduces the death benefit of course, but can be used for anything, not just long-term care. I use an LIRP for a younger person – maybe 30s -40s – who may not be able to get a long-term care insurance policy for health reasons, but life insurance underwriting will accept the health issues he or she has.

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