Many people with life insurance should keep their policies.
For policyholder insureds who no longer have a need for life insurance coverage and are looking for cash they can use to pay for long-term care, life settlements can provide a welcome financial lifeline.
Over the last 15 years, LTC-life settlements have paid millions of dollars for senior care services, such as assisted living care, home care, memory care, and skilled nursing supports and services.
A life settlement can be especially valuable for a client with long-term care financing needs because of tax considerations.
For those with an immediate need for care – an inability to perform two or more "activities of daily living" without assistance — the proceeds from the LTC-life settlement can be tax-free.
When a client spends the proceeds on care, Medicaid will recognize the transactions as a legitimate way to get financial resources down to the Medicaid eligibility limit.
Clients who need long-term care might get high prices for policies, because the market offers favorable pricing for higher-age insureds with significant impairments.
More recently, life settlement annuities have emerged.
Policy owners can now roll the proceeds of life settlements into contracts designed specifically hold the proceeds from life settlement transactions.
Chris Orestis is president of 
