With all three of your sons now heads of families, the two of you have begun to focus your attention on your own future financial security, with plans to retire from full time work three years from now (you’re now 63, she is 62). In reviewing your insurance and estate plans, you realize that you had been focused on guaranteeing that your children would be able to enter the professional workforce unencumbered by debt were something to happen to you.
The emphasis now needs to be on you not becoming a burden to them, which means prepaying for funeral arrangements and resizing the insurance coverage. In reviewing your existing long term care policies and also exploring various other offerings, you have concerns about keeping up with rising premiums post retirement. A related consideration is that your home mortgage has just been fully retired; that, along with the ability to reduce life insurance coverage, will free up some dollars in the monthly budget to use for the long term care coverage.
You’re right to realize that long term care insurance may be of increasing importance as you plan for retirement, reasoning that, relieved of the need to make monthly mortgage payments,* you’ll be better able to fund insurance premiums. However, you might go one step further in viewing your home as a source of funding for your own future financial needs, by arranging for a reverse mortgage line of credit.
One possible planning tactic might be to increase the monthly benefit on your long term care policies, while lengthening the elimination period (meaning the payout of benefits would begin months after a claim was filed). Both the burden of inevitable future increases in premium on the long term care policies and any at-home or facility care needed during the policies’ “waiting period” would be funded by drawing down your reverse mortgage line of credit. There will be no obligation for you to make monthly mortgage payments* on the reverse mortgage loan. In fact, the unused portion of your equity would be credited with interest at the same rate as that being charged on the outstanding balance.
By using your own housing wealth, you can shift the focus of your financial and insurance planning from your children to yourselves.
https://mutualreverse.com/david-garrison
Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here (and scroll down).
*Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees. David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.orgEqual Housing Lender