3. Defered lifetime annuity
No. 3 on our list of alternatives to long-term care insurance is a lifetime annuity. Basically, this is an income stream that you purchase.
An increasingly widespread practice is to purchase a deferred lifetime annuity that could be used to pay for long-term care expenses if the need arises. You get a lump sum of money and buy a monthly income stream that will be delivered at some point in the future—a date when you think you may possibly need long-term care.
This way, if you need long-term care, you have an income stream to pay for it. If you don’t, then the money can supplement your lifestyle. A deferred lifetime annuity is one of the best alternatives to long-term care because it can be bought with riders to guarantee cost of living adjustments, a return on your principal, survivor benefits, and more.
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