Long-Term Care Funding Options

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Repurpose Life and Annuity Policies

Utilize a 1035 Exchange to repurpose older, no longer needed, Life Insurance and annuities policies with cash values fund long-term care planning.

RMD (Reallocate Required Minimum Distributions)

After age 70 1/2 consider using some of your Required Minimum Distributions from your qualified retirement accounts such as IRAs, 401k, 403b, 457, etc. 

HEALTH SAVINGS ACCOUNTS are one of the most tax favored savings vehicles available to Americans.

Using a Health Savings Account to Pay Long-Term-Care Premiums


Use money from your HSA tax-free to pay your long-term-care insurance premiums, with the maximum annual tax-free amount based on your age

Since they are completely tax free — funded with pre-tax dollars and not subject to taxes at withdrawal —they are a great way to save money for future medical costs. In particular, the HSA could be a good way to help cover long-term care costs.

If you are a retired Public Safety Officer (police officer, fire firefighter, chaplain, rescue/ambulance crew member), you have an extra perk. You can withdraw up to $3,000 from your 403(b) plan and use it to pay for accident, health or long-term care insurance. If it goes directly to pay the premiums, that withdrawal will not be included in your taxable income. IRS Publication 575 offers more details.

2015 Expanded Definition PSO 

The Long Term Care Partnership Program is a joint federal-state policy initiative to promote the purchase of private long term care insurance. The Partnership Program is intended to expand access to private long term care insurance policy to pay for long term care services

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