Could A Tax-Free Exchange Help Cover LTC Insurance Costs?

No estate plan is complete without considering long-term care (LTC) expenses and how to pay for them. A partial tax-free exchange of an existing life insurance policy can provide a funding source for LTC insurance coverage. Ordinarily, if the value of a life insurance policy exceeds your basis, lifetime distributions include a combination of taxable gain and nontaxable return of basis. A partial tax-free exchange allows you to defer taxable gain and, to the extent the gain is absorbed by LTC insurance premiums, eliminate it permanently. Contact us for details.