We’ve touched on long-term care options in the past, but I’d like to dig into one option in particular: lump sum or paid-in-full options. But first I’m going to stray off topic for a moment and talk about inheritance.
Why?
Because many women might be about to come into some money.
According to a 2024 survey of women by Ellevest, “45% either had received or expected to receive a financial windfall, the typical amount being around $300K.” This means that many women around the country should be calling their financial advisors and asking, “What should I do with this inheritance?”
Unfortunately, many people who receive an inheritance blow through it in record time. “One study found that one-third of people who received an inheritance had negative savings within two years of the event.”
So, how can you use an inheritance to protect you as you age and possibly provide for your heirs if you don’t use it?
The answer could be to contribute some of it in a lump sum LTC policy.
Unlike regular insurance policies that require ongoing payments, lump-sum policies are a one-and-done deal. This means that once you make the initial payment, you don't have to worry about paying premiums or facing rate increases ever again. This can be a huge relief, especially in retirement when managing monthly expenses becomes crucial.
One of the best things about lump-sum policies is that they lock in your benefit amount at the time of purchase, and it will never decrease. This provides a stable and predictable source of funds when you need them most.
Plus, buying a lump-sum policy while you’re younger is even better. Younger policyholders can lock in higher benefit amounts because they’re considered lower risk, making the policy even more valuable.
Worried about wasting money on premiums if you never use the policy? Lump-sum policies cover you with a return of premium feature. If you don’t end up using the policy, your premium is returned to your heirs income-tax-free.
As a financial advisor who works with single Gen X women, I’ve seen firsthand how a lump-sum policy has given clients a stronger sense of security when it comes to their future. It is possible to turn a one-time windfall into a lasting financial safety net that can provide income and security for years.
The bottom line when it comes to inheriting money is that you should discuss your options with a financial advisor. We can help you make educated decisions based on your specific situation.
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