How a $400,000 single premium provides up to $1.2M in LTC benefits — with a guaranteed estate benefit if care is never needed.
Anna – Age 80, widow
Net worth: $2.3 million (excluding her home)
Liquid assets: $1.5 million
Goal: Protect herself, her estate, and her children from the potentially devastating cost of long-term care.
The firm recommended a single premium annuity for LTC costing $400,000, which provides:
| Premium paid | $400,000 (one-time) |
| Monthly LTC benefit | $16,667/month |
| Benefit duration | Up to 6 years |
| Total potential LTC benefit | $1,200,000 |
If Anna dies in year one of her policy, the insurer will pay her estate a death benefit of $407,572 — making the LTC coverage essentially free. Her heirs receive more than she paid in.
If Anna cancels the policy in year ten without ever using it, the insurer will pay Anna $482,505 — a net gain of $82,205 over her original $400,000 premium.
To fund $1.2 million in LTC expenses through self-insurance at a 50% tax bracket would require earning $2.4 million. Under this policy, Anna pays only the refundable $400,000 premium while accessing $1.2 million in benefits — potentially netting $800,000 tax-free from the insurer.
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