Using an Annuity to Fund Long Term Care in New Jersey

New Jersey is one of the most expensive states in the country for long term care. A semi-private nursing home room runs over $9,000 per month. Assisted living averages around $6,500. A three-year stay — close to the national average — can easily cost $250,000 to $330,000.

Most people do not have a plan for that. And the traditional solution — long term care insurance — has become increasingly difficult to find and expensive to keep.

There is a better option that most people have never heard of: a long term care annuity.

What Is a Long Term Care Annuity?

A long term care annuity — sometimes called a hybrid or asset-based LTC annuity — combines a fixed annuity with a long term care benefit rider. You make a single lump sum deposit, your money grows over time, and if you ever need qualifying care, the policy provides a pool of funds to pay for it.

The remarkable part: that pool is typically two to three times your deposit.

The $100,000 Example

You deposit $100,000 into a hybrid LTC annuity. Here is what you get:

• Your $100,000 continues to grow inside the annuity, earning interest tax-deferred
• The carrier establishes a long term care benefit pool of $200,000 to $300,000
• If you need care, the policy pays from your account value first, then from the additional LTC pool
• If you never need care, your full account value passes to your beneficiaries

You put in $100,000 and have up to $300,000 available for care. The coverage did not cost you a separate premium — it was funded by the insurance company using the time value of your deposit.

Why This Beats Traditional LTC Insurance

Traditional long term care insurance requires ongoing annual premiums — often $3,000 to $6,000 per year. If you pay for 20 years and never need care, you lose every dollar paid in. Carriers have also repeatedly raised premiums on existing policyholders, sometimes dramatically. Many have exited the market entirely.

A hybrid LTC annuity is different:

• Single deposit, no ongoing premiums — ever
• If you never need care, your heirs receive the account value
• Premium cannot increase after issue
• Typically easier to qualify for than standalone LTC policies

Who Needs to Think About This?

Statistically, 70% of people turning 65 today will need some form of long term care. Medicare covers very little of it. Medicaid covers it — but only after you have spent down most of your assets. The people who protect their wealth are those who planned before they needed it.

A hybrid LTC annuity is particularly well-suited for:

• People with $50,000 to $500,000 sitting in CDs or savings accounts they are not actively spending
• Anyone who was denied traditional LTC insurance due to health underwriting
• People who want LTC protection but do not want the risk of paying premiums for decades and getting nothing back
• Anyone who wants to protect their other retirement assets from being depleted by care costs

The Right Money to Use

The ideal source for a hybrid LTC annuity is money you are already not spending — a CD rollover, a savings account that has been sitting idle, an old 401(k) that is not part of your active retirement income plan. You are not sacrificing liquidity you need. You are repositioning money that was already parked somewhere, and giving it a much more powerful job.

If you want to see what a long term care annuity illustration looks like with your specific numbers — deposit amount, age, and benefit structure — reach out for a free no-obligation consultation. These illustrations are carrier-specific and worth seeing before you decide anything.