Using Single Premium Life to Pay for Long-Term Care Expenses

Let me preface this newsletter by stating that it’s really for readers who are 50 and older or for those who are younger but have family members or friends who are 50 and older.

There are a lot of people who have “money sitting on the sideline” (sitting in savings instead of being invested in the stock market).

Why do people have money sitting on the sidelines? Because they are afraid of stock market crashes like the -49% crash in 2000-2002, -57% crash in 2007-2009, and -34% in 2020 (S&P 500 returns).

If you typically have money sitting on the sidelines, I’d like to have you think about allocating some of that money into a “Single Premium Life” (SPL) policy.

SPL policies are designed to provide “living” benefits

SPL policies are designed NOT to maximize the death benefit, but are instead designed to provide Long-Term Care (LTC) benefits. The LTC benefit comes in the form of an accelerated death benefit where the money is used while alive to pay for LTC expenses.

Long-Term Care Expenses

Over 50% of the American public will need LTC at some point in their lives. Twenty percent of the American public will need LTC for more than five years. Because the average cost of care can easily exceed $5,000 a month, there is a significant need to plan now to pay for these inevitable expenses.

Benefits of an SPL policy

To understand why an SPL can be an invaluable tool as part of your estate/financial plan, I’ve bullet pointed some of the benefits:

1) Simplified issue—even if you have health issues, you may still qualify for SPL.

2) Long-term care benefits—this is a benefit built into almost all SPL policies and is the main reason people buy them.

An SPL policy offers insureds a tax-free LTC benefit; and if the LTC benefits are not used, a nice death benefit will pass income tax-free to the beneficiaries (much more money will pass vs. keeping money in CDs or money market accounts). This is much less painful than using traditional LTC insurance which if you don’t use it the premium seems like a waste of money.

3) Avoiding probate—unlike CDs or savings accounts, the death benefit from an SPL will pass outside of the probate process.

4) Liquidity—when people think of funding a life insurance policy, they typically think of large surrender charges. Some SPL policies have no surrender charge and come with a Return of Premium (ROP) option (which is why it’s a terrific option for money sitting in savings).

Example—Here is an example of one of the better policies in the marketplace today.

Let’s take a 65-year old with a $100,000 premium (money that’s sitting in savings). This example has a 5% inflation rider and a 90-day elimination period (typical terms).

-$99,767 initial death benefit ($100k at ages 72 and beyond)

-LTC Benefit (72 months)

  • $3,466 a month at age 65 (total benefit w/inflation rider = $282,904)
  • $7,206 a month at age 80 (total benefit w/inflation rider = $588,137)

-Cash surrender value = $80,000 in year one and then $100k at age 70

Tough to match these benefits

The typical person who likes to keep money in savings who will incur LTC costs will have slightly more than $100,000 to pay for LTC costs when using this SPL policy.

The total benefit at issue is $282,904, and nearly $600,000 at age 80 when it’s likely it will be needed.

Question: How are you budgeting to pay for your LTC expenses in retirement?


If you have money sitting idle in CDs or money market accounts, you can put that money to better use. You can use some of that money to fund an SPL policy where you can insure against the expenses that more than 50% of the American public will incur at some point in their lives.

There is very little downside to using SPL to protect against future LTC costs and the benefits can literally be life-changing (saving people hundreds of thousands of dollars in TLC costs).

Finally, all SPL policies have a nice death benefit that will pass outside of the probate process and will exceed the account value of any monies held in CDs or money market accounts.

For more information on this powerful product, please feel free to give me a call email me so we can set up a time to talk.

Bill Kearney

Integrated Financial Concepts, LLC
132 Joe Knox Avenue, Ste 100F
Mooresville, NC 28117
(704) 464-2426

The S&P 500 index is designed to be a broad-based unmanaged leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large-cap universe or representative of the equity market in general. This example is for illustrative purposes only and does not take into account your particular investment objectives, financial situation, or needs and may not be suitable for all investors. It is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

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