A Long Term Care Benefit Plan is not long term care insurance, and it is not a policy loan that costs fees and interest and must be paid back.  When a policy owner converts their life insurance policy into a Long Term Care Benefit Plan, there are no fees, no premium payments, no interest charges and nothing ever needs to be paid back.  The policy owner is actually obtaining the maximum present day value of the policy and protecting the funds in an irrevocable Benefit Account that keeps them private pay.  The policy is no longer considered an asset that could count against them for future Medicaid eligibility.

In a policy loan, in addition to high fees and interest payments, the policy itself is collateral securing the loan and interest, which means that until the loan is paid back the policy remains an asset that counts against the policy owner for future Medicaid eligibility. With a Long Term Care Benefit Plan, the policy owner will never pay fees, interest, and nothing is ever paid back.

Enrollment in a Long Term Care Benefit Plan can take as little time as 30 days and will start making immediate payments to cover any form of senior care.   Long Term Care Insurance is purchased before a person needs senior care.  The younger and healthier a person is when they purchase insurance, the lower the premium payments will be and the more option they will have.  A person who would qualify to purchase long term care insurance would be too young and healthy to enroll in the Long Term Care Benefit Plan.  By comparison, a person who qualifies to convert a life insurance policy into a Long Term Care Benefit Plan would be too old or sick to buy long term care insurance.

If a person owns long term care insurance and life insurance they can convert the life policy and use both together to make sure they maximize their senior care options.