Life Insurance for long-term assisted care

Insurance
#1

Hello, my financial adviser recommended MoneyGuard Market Advantage for assisted care expenses when I get old. I wanted to make sure that when I get old, there is someone to take care of me. I am currently 43 years old.

With this plan you pay $3K per year for 15 years, they invest this money for you. The growth on this investment is tax-free. And if you start withdrawing the money at the age of 80 you will get ~$8500 per month (assuming that the growth was around 6%). If you start withdrawing at the age of 85 it is about ~$9700 per month.
You can only use this money for qualified assisted care expenses.
The attractive part is that it’s being tax-free. Is this something beneficial or is there better way to invest this money?
P.S. I can not use ROTH IRA due to income limits.
Thanks,
Ozan

#2

Hi @Ozan!

To address the last line first, you can potentially use a backdoor Roth IRA. PFC just came out with an in-depth article on this topic. Here is the link:

MoneyGuard Market Advantage is a universal life insurance policy that has a long term care rider. Financial advisors sometimes recommend these because they get paid a commission if you buy one. That may or may not be the case in this instance. There are FAR more efficient ways to save for long term care than through using a universal life insurance policy. Depending on your situation, using an HSA or even a brokerage account is likely the far better route. Since you are young, you have the ability to build up a sizable portfolio in anticipation of healthcare costs when you are older.

I hope this helps. Please let us know if you have any other questions!

Shane