Long-Term Care Insurance Should Be a Core Part of Your Financial Plan
The Overlooked Pillar of Wealth Planning
Too many investors obsess over portfolio returns and tax strategy while ignoring one of the most predictable financial risks: the cost of care. In a recent conversation between respected financial advisor Ward Brickman of Fortress Financial and Rona Loshak, Founding Partner of Karp Loshak LTC Insurance Solutions, the point was driven home—long-term care insurance (LTCI) isn’t a “nice to have.” It’s essential.
This is about leverage. About independence. About protecting wealth, preserving lifestyle, and making sure your family is never forced into impossible choices because you didn’t plan ahead.
Long-Term Care Insurance: Your Portfolio’s Safety Net
Think of LTC insurance as portfolio insurance—a moat around your assets. It’s not just about paying for care. It’s about making sure that your retirement plan, your estate plan, and your family’s financial future remain intact no matter what life throws at you.
- Costs of care are exploding and will only go higher.
- Most people don’t want to burden their families.
- And almost everyone wants to leave a legacy, not a liability.
The reality: once you reach age 80, there’s an 80% chance you’ll need care. If you don’t have a plan, your portfolio becomes the plan—and that’s not good planning.
The Harsh Reality of Relying on Government Programs
Medicare: Limited, Temporary, Restrictive
Medicare only covers skilled rehab care, and only for up to 100 days. Beyond that? You’re on your own.
Medicaid: Tough Triggers, Fewer Options
Medicaid requires you to qualify both financially and medically. These thresholds are strict and getting stricter. Even if you qualify, you won’t have much say in where or how you receive care.
Translation: if you want choice, dignity, and control, government programs won’t cut it.
How Long-Term Care Insurance Actually Works
The beauty of LTC insurance is in its clarity and guarantees.
A benefit is triggered when your doctor confirms you need help with two out of six Activities of Daily Living (ADLs): dressing, bathing, transferring, toileting, continence, or eating. Or, if you need supervision due to cognitive decline.
These triggers are standardized under HIPAA law (7702B contracts) since 1996. No guesswork. No gray area.
And like your bank or brokerage accounts, LTC insurance policies are backed by state and federal guarantees.
Modern LTC Insurance: Flexible, Tax-Free, and Powerful
Cash Indemnity Plans
- 100% tax-free cash paid directly to you.
- No receipts, no approvals.
- Just trigger the benefit and the funds are deposited into your account.
Hybrid Plans: The “No Lose” Option
New hybrid plans combine long-term care and life insurance. If you need care, you get it—tax-free. If you don’t, your loved ones get a death benefit greater than what you paid in.
This eliminates the old objection of “use it or lose it.”
Life Insurance with LTC Riders
These policies provide both a large death benefit and a large LTC benefit. You’re essentially pre-purchasing flexibility. Ideal for:
- Younger families who need significant death benefits.
- Blended families with complex estate needs.
- High-net-worth individuals protecting generational wealth.
⚠️ Critical note: Only consider riders that are 7702B compliant. Avoid 101G riders—they often restrict benefits, require permanent conditions, or reduce payouts based on claim-time calculations.
Standalone LTC Insurance
Still available, still comprehensive, and still often the most affordable option. Many standalone policies also offer tax-deductible premiums if clearly separated from other benefits.
Smart Funding Strategies
Repositioning Existing Assets
- 1035 Exchange: Move cash value from an old life insurance policy or annuity into an LTC plan.
- Qualified Retirement Accounts: Some new products allow funding with IRA or 401K money, spreading out taxes over 10–30 years.
For Business Owners
- Potential tax deductions for premiums.
- Ability to offer LTC insurance as a voluntary group benefit—a differentiator for talent retention.
Avoiding State Payroll Taxes
States like Washington have already implemented payroll taxes for workers without LTC coverage. More states are moving this direction. Owning a private LTC policy allows you to opt out of state-run programs that provide minimal benefits.
Who Should Be Looking at LTC Insurance?
- People in their early 50s: Best health, best pricing, strongest guarantees.
- Couples with family health history: Planning ahead avoids uninsurability later.
- High-net-worth individuals: Protect assets and ensure premium care.
- Anyone who doesn’t want to burden loved ones: Even modest-income families benefit from coverage.
Policies can be issued up to age 79 with strong health, but waiting can cost you both financially and medically.
The Family Dynamic No One Talks About
Without a plan, families face conflict. Should money be spent on care? Who decides what “appropriate” care is? Which sibling manages the process?
A small premium now eliminates future family conflict. Hybrid LTC contracts provide tax-free care dollars, preserving estate assets, ensuring quality care, and giving your family peace of mind.
Why Karp Loshak LTC Insurance Solutions?
Since 2008, Karp Loshak LTC Insurance Solutions has been the go-to resource for clients nationwide. Based in Long Island, NY, we combine local expertise with national reach.
Co-founders Rona Loshak and Natalie Karp are independent, award-winning specialists who:
- Analyze every plan and carrier on the market.
- Provide consultative, educational guidance.
- Handle underwriting, medical records, interviews, and appeals.
- Offer annual reviews on tax law and industry changes.
From conversation to contract, they ensure successful outcomes that protect your wealth and your family’s future.
Based in Long Island, NY — serving clients nationwide.
Learn more about your LTC Insurance Options or email info@karploshak.com.
